Civil Rights Act of 1866: What It Protects and How to Sue

The Civil Rights Act of 1866 was the first federal law to define American citizenship and to guarantee that every citizen, regardless of race, would have the same legal rights as white citizens to make contracts, own property, and use the courts. Signed on April 9, 1866, over President Andrew Johnson’s veto, the statute was Congress’s answer to the Black Codes that Southern states had enacted after the 13th Amendment.¹ Its core provisions live on today at 42 U.S.C. § 1981 and § 1982, and they remain among the most heavily used tools in modern racial discrimination lawsuits.

Why Congress Passed It

The 13th Amendment abolished slavery in December 1865, but Southern legislatures moved quickly to reinstate forced labor by another name. South Carolina designated all Black workers as “servants” and their employers as “masters,” and required Black residents to buy a license before practicing a trade or running a business. Mississippi made it a crime for a Black worker to leave an employer before a labor contract expired and authorized any citizen to arrest and return the worker by force.²

Senator Lyman Trumbull of Illinois introduced the bill on January 5, 1866, arguing that the 13th Amendment meant nothing if freed people had no way to exercise their freedom.¹ Congress overrode Johnson’s veto and passed it into law. Because supporters worried a later Congress might repeal the statute, they wrote its citizenship and equal-protection principles into the Constitution itself two years later, in the 14th Amendment.

What the Law Guarantees

Citizenship

Section 1 declared that every person born in the United States was a citizen, with a single exception for Native Americans who were not taxed. That was a direct overruling of the Supreme Court’s 1857 decision in Dred Scott v. Sandford, which had held that people of African descent could never be citizens.¹ The 14th Amendment later adopted nearly identical citizenship language.

Contracts

The contract right, now at 42 U.S.C. § 1981, guarantees all persons in the United States the same right as white citizens to make and enforce contracts.³ In employment, that reaches every stage of the working relationship: hiring, pay, promotions, assignments, discipline, and firing.

Congress broadened the statute in 1991. The amendment defined “make and enforce contracts” to include the making, performance, modification, and termination of contracts, and the enjoyment of all benefits and privileges of the relationship. Before that fix, some courts had read § 1981 to cover only the initial formation of a contract, leaving workers unprotected once on the job. Subsection (c) also confirms that the statute protects against private, nongovernmental discrimination, not just discrimination “under color of State law.”³

Property

Section 1982 gives every citizen the same right as white citizens to buy, sell, lease, inherit, and hold real estate and personal property.⁴ It covers homes, commercial buildings, land, vehicles, and financial assets. In Jones v. Alfred H. Mayer Co. (1968), the Supreme Court held that § 1982 “bars all racial discrimination, private as well as public, in the sale or rental of property,” reaching interference from “any source whatever, whether governmental or private.”⁵

Access to Courts and Equal Punishment

Section 1981 also guarantees the right to sue, to be a party in legal proceedings, and to give evidence on the same terms as white citizens.³ Many states before 1866 barred Black Americans from testifying against white parties, which effectively made every other right unenforceable. The statute additionally requires that criminal punishments, fines, taxes, and licensing fees be applied without regard to race, targeting the Black Codes’ practice of imposing harsher sentences on Black defendants for identical offenses.

Who the Law Protects

The two main provisions use different language, and the difference matters. Section 1981 protects “all persons within the jurisdiction of the United States,” which includes non-citizens.³ Section 1982 protects “all citizens of the United States,” a narrower group.⁴ A lawful permanent resident who faces racial discrimination in a contract has a § 1981 claim; the § 1982 property protections may not extend the same way to non-citizens.

“Race” under these statutes also reaches further than modern usage suggests. In St. Francis College v. Al-Khazraji (1987), the Supreme Court held that § 1981 protects “identifiable classes of persons who are subjected to intentional discrimination solely because of their ancestry or ethnic characteristics.”⁶ A professor of Arab descent who was denied tenure could sue on that basis. The Court’s reasoning: § 1981 uses “race” as the word was understood in 1866, when it covered what we would now call ethnic groups.

How It Compares to Title VII and the Fair Housing Act

Most people associate employment discrimination suits with Title VII of the Civil Rights Act of 1964. Section 1981 overlaps with Title VII, but it has practical advantages that make it the vehicle of choice for many race-discrimination claims:

Title VII applies only to employers with 15 or more employees. Section 1981 has no size threshold, so employees of small businesses can use it.⁷
Title VII requires filing a charge with the Equal Employment Opportunity Commission and waiting out the agency process before suing. Section 1981 is enforced by individuals going directly to federal court.⁸
Title VII caps combined compensatory and punitive damages, topping out at $300,000 for the largest employers. Section 1981 has no cap.⁹
Because § 1981 protects all contracts, it also reaches commercial transactions, insurance, and consumer relationships that Title VII does not cover.

The Supreme Court confirmed in Johnson v. Railway Express Agency that § 1981 and Title VII are “separate, distinct, and independent” remedies a plaintiff can pursue at the same time.¹⁰ Filing an EEOC charge does not pause the § 1981 clock, so anyone using both statutes has to track each deadline separately.

On the housing side, § 1982 is narrower than the Fair Housing Act of 1968 in some respects and broader in others. The Fair Housing Act reaches discrimination based on race, religion, sex, national origin, disability, and familial status, and it has an administrative process through HUD. Section 1982 covers only race, but it applies to transactions the Fair Housing Act does not, such as commercial leases and private sales of personal property, and a plaintiff can go straight to court.

What a Plaintiff Has to Prove

Winning under the 1866 Act is not easy. Section 1981 requires proof of intentional racial discrimination. A policy that happens to disadvantage one racial group more than another is not enough on its own, which distinguishes § 1981 from some Title VII disparate-impact claims.

The Supreme Court raised the bar again in Comcast Corp. v. National Association of African American-Owned Media (2020), holding that a § 1981 plaintiff must prove race was the “but-for” cause of the injury.¹¹ In plain terms: the plaintiff has to show that the contract denial, firing, or other adverse action would not have happened but for their race. That is stricter than the “motivating factor” test that applies to some Title VII claims, and it governs every stage of the case, from the pleadings through trial. In practice, it means gathering hard evidence of intent: emails, statements, decision-making patterns, or comparators showing that similarly situated people of a different race were treated better.

How Lawsuits Get Filed

A § 1981 or § 1982 plaintiff can file directly in federal court without going through the EEOC or any other agency first.⁸ That avoids the months of administrative processing built into Title VII.

The statute of limitations for § 1981 depends on the conduct. For claims about post-formation conduct such as firing or denial of promotion, the federal four-year catchall period under 28 U.S.C. § 1658 generally applies. For claims tied to the original formation of a contract, courts typically borrow the relevant state’s personal injury limitations period. The clock runs from the date of the discriminatory act, not from when the plaintiff figures out what happened, so delay is dangerous.

Suing a state or local government official adds a step. The claim has to travel through 42 U.S.C. § 1983, which is the mechanism for holding government officials accountable when they deprive someone of a federally protected right while acting in an official capacity. States themselves are not “persons” under § 1983, but individual officials and local governments are.

Damages and Attorney’s Fees

A successful plaintiff can recover compensatory damages for both financial and emotional harm. Back pay, lost business opportunities, and out-of-pocket expenses fall on the economic side; pain, humiliation, and emotional distress fall on the non-economic side. Punitive damages are available when the defendant’s conduct was malicious or reckless.

The absence of a cap is what sets § 1981 apart. Under Title VII, compensatory and punitive damages together are capped on a sliding scale based on employer size, ending at $300,000 for employers with more than 500 employees.⁹ Section 1981 has no such ceiling, which is why the largest race-discrimination verdicts in the country tend to come through it.

A prevailing plaintiff can also recover attorney’s fees. Under 42 U.S.C. § 1988, a court may award reasonable attorney’s fees, including expert witness fees, to the winning party in a case brought to enforce § 1981 or § 1982.¹² That fee-shifting is what makes many of these cases possible; discrimination litigation is expensive, and plaintiffs often could not afford it without the prospect of recovering costs from the defendant if they win.

1
National Constitution Center. Civil Rights Act of 1866
2
National Constitution Center. Black Codes (1865)
3
Office of the Law Revision Counsel. 42 USC 1981 – Equal Rights Under the Law
4
Office of the Law Revision Counsel. 42 USC 1982 – Property Rights of Citizens
5
Library of Congress. Jones v Alfred H Mayer Co – 392 US 409 (1968)
6
Justia Law. St Francis College v Al-Khazraji – 481 US 604 (1987)
7
United States Court of Appeals for the Third Circuit. Instructions for Race Discrimination Claims Under 42 USC 1981
8
U.S. Equal Employment Opportunity Commission. Other Employment and Civil Rights Laws Not Enforced by the EEOC
9
Office of the Law Revision Counsel. 42 US Code 1981a – Damages in Cases of Intentional Discrimination
10
Justia Law. Johnson v Railway Express Agency Inc – 421 US 454 (1975)
11
Supreme Court of the United States. Comcast Corp v National Association of African American-Owned Media (2020)
12
Office of the Law Revision Counsel. 42 USC 1988 – Proceedings in Vindication of Civil Rights