Ninth Circuit Says Federal Law Bans Employment Discrimination Against U.S. Citizens

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A naturalized citizen sued Meta Platforms, Inc., which owns Facebook, Instagram and WhatsApp, for employment discrimination, alleging the social media company chose to hire noncitizens with specialty worker visas because it could pay them less. The Ninth Circuit, relying on a federal statute, reversed the district court’s dismissal of the action and ruled that “all persons within the jurisdiction of the U.S. shall have the same legal and contractual rights as white citizens,” and that employment discrimination based on American citizenship is prohibited.

The court relied on 42 U.S.C. §1981 (a) which gives equal rights under the law to determine that “all persons within the jurisdiction of the United States shall have the same right in every State and Territory…to the full and equal benefit of all laws…as enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and extractions of every kind, and to no other.”

The 2-1 decision by Circuit Judge Eric D. Miller on June 27, was concurred with by Justice Marsha S. Berzon, with a dissent by Justice Lawrence VanDyke. It reversed the dismissal of the case by Magistrate Judge Laurel D. Beeler of the Northern District of California, who had ruled that Plaintiff Purushothaman Rajaram failed to state a claim because Judge Beeler believed that §1981 (a) “does not bar discrimination based on U.S. citizenship” as Rajaram argued. The Ninth Circuit disagreed.

The Ninth Circuit’s opinion summarized the facts that led to the decision before them. Miller explained that the plaintiff is a naturalized U.S. citizen and an information technology professional who had experience managing programs that developed software. Rajaram alleged that Meta refused to hire him because “it prefers to hire noncitizens holding H-1B visas to whom it can pay lower wages.” This visa program allows employers to hire qualified workers from abroad for specialty occupations when there are inadequate numbers of skilled workers who are allowed to work in this country.

Miller stated the single issue before the court was whether 42 U.S.C. § 1981 prohibits discrimination in hiring against United States citizens on the basis of their citizenship. He then analyzed the text of 42 U.S.C. §1981 (a) and wrote that it “does not expressly provide a cause of action for those injured by violations of the nondiscrimination principle… but it still affords a federal remedy against discrimination in private employment. “

He also explained that it is the plaintiff’s burden to “identify an impaired ‘contractual relationship’ …under which the plaintiff has rights.” The judge concluded that this relationship is protected by §1981 (a) and established Supreme Court precedents including Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 476 (2006), which held that there is liability when “defendants have discriminated in a way that prevented individuals who sought to enter into contractual relationships from doing so.” Thus, he decided that the statutory text does prohibit employers from discriminating against U.S. citizens.

Miller dismissed Meta’s arguments that said the relevant statute only protects against discrimination aimed at “race or alien status.” Rather, he concluded that the text of §1981 (a) is “unambiguous.” To support this conclusion, he went back to the Congressional intent behind the Fourteenth Amendment. He wrote that Rajaram’s case was reminiscent of others that discriminated against Chinese immigrants, whose rights were restricted by a California law. To prevent such unfairness, Congress changed the wording of a protective act to “all persons,” instead of “citizens.”

The opinion also said that there were important “nontextual” arguments to support Rajaram’s allegations. To refrain from doing so would “raise serious constitutional questions” that could be avoided. Miller explained this is because “a statute is not a chameleon, its meaning subject to change depending on the presence or absence of constitutional concerns.” He then reviewed other Meta arguments that were equally nonpersuasive. Meta’s attempt at using §1981 (a)’s legislative history was dismissed because the justices said the text of the statute was “clear.”

Similarly, Meta’s reliance on the Immigration Reform and Control Act of 1986 was not appropriate because it used only language from minority views to support its wrongful conclusion, and the cited law was inaccurately described. In addition, Miller wrote that Meta’s interpretation “would lead to nonsensical results if extended to additional nondiscrimination statutes.

Finally, the Court conceded that its interpretation of U.S.C. §1981 (a) differs from that of the Fifth Circuit. In Chaiffetz v. Robertson Research Holding, Ltd, an American employee of a British company sued because he alleged his promotion was denied because of his citizenship. The Fifth Circuit said that the section did not protect against discrimination based on citizenship. Miller defended the Ninth Circuit’s view by stating, “Given everything we have said so far, the problem with that reasoning should be apparent. Discrimination based on alienage is indeed different from racial discrimination, but it is not different in any way that is relevant to the text of section 1981.”

For all these reasons, the Ninth Circuit concluded that Rajaram did indeed state a claim and has a right to his day in court. His case was reversed and remanded for a new trial.

VanDyke’s dissent disagreed that the text of §1981 (a) supported the majority’s interpretation. He pointed out that this case is “particularly appealing today, when conditions create more incentives to discriminate against citizens. Illegal border crossings have increased year over year since 2021, with almost two million encounters reported during the first half of this fiscal year alone…Given that it is easier to pay such noncitizens lower wages, it’s easy enough to see how this creates growing economic pressure. A statute that protects against this sort of discrimination may be what the country needs, but it isn’t what Congress gave us in Section 1981. And it is not my role to transform this statute into what I wish it was.”

Maureen Rubin
Maureen Rubin
Maureen is a graduate of Catholic University Law School and holds a Master's degree from USC. She is a licensed attorney in California and was an Emeritus Professor of Journalism at California State University, Northridge specializing in media law and writing. With a background in both the Carter White House and the U.S. Congress, Maureen enriches her scholarly work with an extensive foundation of real-world knowledge.
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