Patterson v. McLean Credit Union/Opinion of the Court

by Anthony Kennedy

In this case, we consider important issues respecting the meaning and coverage of one of our oldest civil rights statutes, 42 U.S.C. § 1981.

* Petitioner Brenda Patterson, a black woman, was employed by respondent McLean Credit Union as a tel er and a file coordinator, commencing in May 1972. In July 1982, she was laid off. After the termination, petitioner commenced this action in the United States District Court for the Middle District of North Carolina. She alleged that respondent, in violation of 14 Stat. 27, 42 U.S.C. § 1981, had harassed her, failed to promote her to an intermediate accounting clerk position, and then discharged her, all because of her race. Petitioner also claimed this conduct amounted to an intentional infliction of emotional distress, actionable under North Carolina tort law.

The District Court determined that a claim for racial harassment is not actionable under § 1981 and declined to submit that part of the case to the jury. The jury did receive and deliberate upon petitioner's § 1981 claims based on alleged discrimination in her discharge and the failure to promote her, and it found for respondent on both claims. As for petitioner's state law claim, the District Court directed a verdict for respondent on the ground that the employer's conduct did not rise to the level of outrageousness required to state a claim for intentional infliction of emotional distress under applicable standards of North Carolina law.

In the Court of Appeals, petitioner raised two matters which are relevant here. First, she challenged the District Court's refusal to submit to the jury her § 1981 claim based on racial harassment. Second, she argued that the District Court erred in instructing the jury that in order to prevail on her § 1981 claim of discriminatory failure to promote, she must show that she was better qualified than the white employee who she alleges was promoted in her stead. The Court of Appeals affirmed. 805 F.2d 1143 (CA4 1986). On the racial harassment issue, the court held that, while instances of racial harassment "may implicate the terms and conditions of employment under Title VII [of the Civil Rights Act of 1964, 78 Stat. 253, 42 U.S.C. § 2000e et seq.,] and of course may be probative of the discriminatory intent required to be shown in a § 1981 action," id., at 1145 (citation omitted), racial harassment itself is not cognizable under § 1981 because "racial harassment does not abridge the right to 'make' and 'enforce' contracts," id., at 1146. On the jury instruction issue, the court held that once respondent had advanced superior qualification as a legitimate nondiscriminatory reason for its promotion decision, petitioner had the burden of persuasion to show that respondent's justification was a pretext and that she was better qualified than the employee who was chosen for the job. Id., at 1147.

We granted certiorari to decide whether petitioner's claim of racial harassment in her employment is actionable under § 1981, and whether the jury instruction given by the District Court on petitioner's § 1981 promotion claim was error. 484 U.S. 814, 108 S.Ct. 65, 98 L.Ed.2d 29 (1987). After oral argument on these issues, we requested the parties to brief and argue an additional question:

"Whether or not the interpretation of 42 U.S.C. § 1981 adopted by this Court in Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976), should be reconsidered." Patterson v. McLean Credit Union, 485 U.S. 617, 108 S.Ct. 1419, 99 L.Ed.2d 879 (1988).

We now decline to overrule our decision in Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976). We hold further that racial harassment relating to the conditions of employment is not actionable under § 1981 because that provision does not apply to conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations. Finally, we hold that the District Court erred in instructing the jury regarding petitioner's burden in proving her discriminatory promotion claim.

In Runyon, the Court considered whether § 1981 prohibits private schools from excluding children who are qualified for ad ission, solely on the basis of race. We held that § 1981 did prohibit such conduct, noting that it was already well established in prior decisions that § 1981 "prohibits racial discrimination in the making and enforcement of private contracts." Id., at 168, 96 S.Ct., at 2593, citing Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 459-460, 95 S.Ct. 1716, 1719-1720, 44 L.Ed.2d 295 (1975); Tillman v. Wheaton-Haven Recreation Assn., Inc., 410 U.S. 431, 439-440, 93 S.Ct. 1090, 1094-1095, 35 L.Ed.2d 403 (1973). The arguments about whether Runyon was decided correctly in light of the language and history of the statute were examined and discussed with great care in our decision. It was recognized at the time that a strong case could be made for the view that the statute does not reach private conduct, see 427 U.S., at 186, 96 S.Ct., at 2602 (Powell, J., concurring); id., at 189, 96 S.Ct., at 2603-04 (STEVENS, J., concurring); id., at 192, 96 S.Ct., at 2605 (WHITE, J., dissenting), but that view did not prevail. Some Members of this Court believe that Runyon was decided incorrectly, and others consider it correct on its own footing, but the question before us is whether it ought now to be overturned. We conclude after reargument that Runyon should not be overruled, and we now reaffirm that § 1981 prohibits racial discrimination in the making and enforcement of private contracts.

The Court has said often and with great emphasis that "the doctrine of stare decisis is of fundamental importance to the rule of law." Welch v. Texas Dept. of Highways and Public Transportation, 483 U.S. 468, 494, 107 S.Ct. 2941, 2957, 97 L.Ed.2d 389 (1987). Although we have cautioned that "stare decisis is a principle of policy and not a mechanical formula of adherence to the latest decision," Boys Markets, Inc. v. Retail Clerks, 398 U.S. 235, 241, 90 S.Ct. 1583, 1587, 26 L.Ed.2d 199 (1970), it is indisputable that stare decisis is a basic self-governing principle within the Judicial Branch, which is entrusted with the sensitive and difficult task of fashioning and preserving a jurisprudential system that is not based upon "an arbitrary discretion." The Federalist, No. 78, p. 490 (H. Lodge ed. 1888) (A. Hamilton). See also Vasquez v. Hillery, 474 U.S. 254, 265, 106 S.Ct. 617, 624, 88 L.Ed.2d 598 (1986) (stare decisis ensures that "the law will not merely change erratically" and "permits society to presume that bedrock principles are founded in the law rather than in the proclivities of individuals").

Our precedents are not sacrosanct, for we have overruled prior decisions where the necessity and propriety of doing so has been established. See Patterson v. McLean Credit Union, supra, 485 U.S., at 617-618, 108 S.Ct., at 1420-1421 (citing cases). Nonetheless, we have held that "any departure from the doctrine of stare decisis demands special justification." Arizona v. Rumsey, 467 U.S. 203, 212, 104 S.Ct. 2305, 2311, 81 L.Ed.2d 164 (1984). We have said also that the burden borne by the party advocating the abandonment of an established precedent is greater where the Court is asked to overrule a point of statutory construction. Considerations of stare decisis have special force in the area of statutory interpretation, for here, unlike in the context of constitutional interpretation, the legislative power is implicated, and Congress remains free to alter what we have done. See, e.g., Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409, 424, 106 S.Ct. 1922, 1930-31, 90 L.Ed.2d 413 (1986); Illinois Brick Co. v. Illinois, 431 U.S. 720, 736, 97 S.Ct. 2061, 2069-70, 52 L.Ed.2d 707 (1977).

We conclude, upon direct consideration of the issue, that no special justification has been shown for overruling Runyon. In cases where statutory precedents have been overruled, the primary reason for the Court's shift in position has been the intervening development of the la , through either the growth of judicial doctrine or further action taken by Congress. Where such changes have removed or weakened the conceptual underpinnings from the prior decision, see, e.g., Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 480-481, 109 S.Ct. 1917, 1919-1920, 104 L.Ed.2d 526 (1989); Andrews v. Louisville & Nashville R. Co., 406 U.S. 320, 322-323, 92 S.Ct. 1562, 1564-1565, 32 L.Ed.2d 95 (1972), or where the later law has rendered the decision irreconcilable with competing legal doctrines or policies, see, e.g., Braden v. 30th Judicial Circuit Ct. of Ky., 410 U.S. 484, 497-499, 93 S.Ct. 1123, 1130-1132, 35 L.Ed.2d 443 (1973); Construction Laborers v. Curry, 371 U.S. 542, 552, 83 S.Ct. 531, 537-538, 9 L.Ed.2d 514 (1963), the Court has not hesitated to overrule an earlier decision. Our decision in Runyon has not been undermined by subsequent changes or development in the law.

Another traditional justification for overruling a prior case is that a precedent may be a positive detriment to coherence and consistency in the law, either because of inherent confusion created by an unworkable decision, see, e.g., Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 47-48, 97 S.Ct. 2549, 2556, 53 L.Ed.2d 568 (1977); Swift & Co. v. Wickham, 382 U.S. 111, 124-125, 86 S.Ct. 258, 265-266, 15 L.Ed.2d 194 (1965), or because the decision poses a direct obstacle to the realization of important objectives embodied in other laws, see, e.g., Rodriguez de Quijas, supra, at 484, 109 S.Ct., at 1921-1922; Boys Markets, Inc. v. Retail Clerks, supra, at 240-241, 90 S.Ct., at 1586-1587. In this regard, we do not find Runyon to be unworkable or confusing. Respondent and various amici have urged that Runyon 's interpretation of § 1981, as applied to contracts of employment, frustrates the objectives of Title VII. The argument is that a substantial overlap in coverage between the two statutes, given the considerable differences in their remedial schemes, undermines Congress' detailed efforts in Title VII to resolve disputes about racial discrimination in private employment through conciliation rather than litigation as an initial matter. After examining the point with care, however, we believe that a sound construction of the language of § 1981 yields an interpretation which does not frustrate the congressional objectives in Title VII to any significant degree. See Part III, infra.

Finally, it has sometimes been said that a precedent becomes more vulnerable as it becomes outdated and after being " 'tested by experience, has been found to be inconsistent with the sense of justice or with the social welfare.' " Runyon, 427 U.S., at 191, 96 S.Ct., at 2604 (STEVENS, J., concurring), quoting B. Cardozo, The Nature of the Judicial Process 149 (1921). Whatever the effect of this consideration may be in statutory cases, it offers no support for overruling Runyon. In recent decades, state and federal legislation has been enacted to prohibit private racial discrimination in many aspects of our society. Whether Runyon's interpretation of § 1981 as prohibiting racial discrimination in the making and enforcement of private contracts is right or wrong as an original matter, it is certain that it is not inconsistent with the prevailing sense of justice in this country. To the contrary, Runyon is entirely consistent with our society's deep commitment to the eradication of discrimination based on a person's race or the color of his or her skin. See Bob Jones University v. United States, 461 U.S. 574, 593, 103 S.Ct. 2017, 2029, 76 L.Ed.2d 157 (1983) ("[E]very pronouncement of this Court and myriad Acts of Congress and Executive Orders attest a firm national policy to prohibit racial segregation and discrimination"); see also Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954); Plessy v. Ferguson, 163 U.S. 537, 559, 16 S.Ct. 1138, 1146-47, 41 L.Ed. 256 ( 896) (Harlan, J., dissenting) ("The law regards man as man, and takes no account of his . . . color when his civil rights as guaranteed by the supreme law of the land are involved"). ^[1]

We decline to overrule Runyon and acknowledge that its holding remains the governing law in this area.

Our conclusion that we should adhere to our decision in Runyon that § 1981 applies to private conduct is not enough to decide this case. We must decide also whether the conduct of which petitioner complains falls within one of the enumerated rights protected by § 1981.

"All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other." Rev.Stat. § 1977.

The most obvious feature of the provision is the restriction of its scope to forbidding discrimination in the "mak[ing] and enforce[ment]" of contracts alone. Where an alleged act of discrimination does not involve the impairment of one of these specific rights, § 1981 provides no relief. Section 1981 cannot be construed as a general proscription of racial discrimination in all aspects of contract relations, for it expressly prohibits discrimination only in the making and enforcement of contracts. See also Jones v. Alfred H. May r Co., 392 U.S. 409, 436, 88 S.Ct. 2186, 2201, 20 L.Ed.2d 1189 (1968) (§ 1982, the companion statute to § 1981, was designed "to prohibit all racial discrimination, whether or not under color of law, with respect to the rights enumerated therein ") (emphasis added); Georgia v. Rachel, 384 U.S. 780, 791, 86 S.Ct. 1783, 1789, 16 L.Ed.2d 925 (1966) ("The legislative history of the 1866 Act clearly indicates that Congress intended to protect a limited category of rights").

By its plain terms, the relevant provision in § 1981 protects two rights: "the same right . . . to make . . . contracts" and "the same right . . . to . . . enforce contracts." The first of these protections extends only to the formation of a contract, but not to problems that may arise later from the conditions of continuing employment. The statute prohibits, when based on race, the refusal to enter into a contract with someone, as well as the offer to make a contract only on discriminatory terms. But the right to make contracts does not extend, as a matter of either logic or semantics, to conduct by the employer after the contract relation has been established, including breach of the terms of the contract or imposition of discriminatory working conditions. Such postformation conduct does not involve the right to make a contract, but rather implicates the performance of established contract obligations and the conditions of continuing employment, matters more naturally governed by state contract law and Title VII. See infra, at 179-180.

The second of these guarantees, "the same right . . . to . . . enforce contracts . . . as is enjoyed by white citizens," embraces protection of a legal process, and of a right of access to legal process, that will address and resolve contract-law claims without regard to race. In this respect, it prohibits discrimination that infects the legal process in ways that prevent one from enforcing contract rights, by reason of his or her race, and this is so whether this discrimination is attributed to a statute or simply to existing practices. It also covers wholly private efforts to impede access to the courts or obstruct nonjudicial methods of adjudicating disputes about the force of binding obligations, as well as discrimination by private entities, such as labor unions, in enforcing the terms of a contract. Following this principle and consistent with our holding in Runyon that § 1981 applies to private conduct, we have held that certain private entities such as labor unions, which bear explicit responsibilities to process grievances, press claims, and represent member in disputes over the terms of binding obligations that run from the employer to the employee, are subject to liability under § 1981 for racial discrimination in the enforcement of labor contracts. See Goodman v. Lukens Steel Co., 482 U.S. 656, 107 S.Ct. 2617, 96 L.Ed.2d 572 (1987). The right to enforce contracts does not, however, extend beyond conduct by an employer which impairs an employee's ability to enforce through legal process his or her established contract rights. As Justice WHITE put it with much force in Runyon, one cannot seriously "contend that the grant of the other rights enumerated in § 1981 [that is, other than the right to "make" contracts,] i.e., the rights 'to sue, be parties, give evidence,' and 'enforce contracts' accomplishes anything other than the removal of legal disabilities to sue, be a party, testify or enforce a contract. Indeed, it is impossible to give such language any other meaning." 427 U.S., at 195, n. 5, 96 S.Ct., at 2606, n. 5 (dissenting opinion) (emphasis in original).

Applying these principles to the case before us, we agree with the Court of Appeals that petitioner's racial harassment claim is not actionable under § 1981. Petitioner has alleged that during her employment with respondent, she was subjected to various forms of racial harassment from her supervisor. As summarized by the Court of Appeals, petitioner testified that

"[her supervisor] periodically stared at her for several minutes at a time; that he gave her too many tasks, causing her to complain that she was under too much pressure; that among the tasks given her were sweeping and dusting, jobs not given to white employees. On one occasion, she testified, [her supervisor] told [her] that blacks are known to work slower than whites. According to [petitioner, her supervisor] also criticized her in staff meetings while not similarly criticizing white employees." 805 F.2d, at 1145.

Petitioner also alleges that she was passed over for promotion, not offered training for higher level jobs, and denied wage increases, all because of her race. ^[2]

With the exception perhaps of her claim that respondent refused to promote her to a position as an accountant, see Part IV, infra, none of the conduct which petitioner alleges as part of the racial harassment against her involves either a refusal to make a contract with her or the impairment of her ability to enforce her established contract rights. Rather, the conduct which petitioner labels as actionable racial harassment is postformation conduct by the employer relating to the terms and conditions of continuing employment. This is apparent from petitioner's own proposed jury instruction on her § 1981 racial harassment claim:

". . . The plaintiff has also brought an action for harassment in employment against the defendant, under the same statute, 42 USC § 1981. An employer is guilty of racial discrimination in employment where it has either created or condoned a substantially discriminatory work environment. An employee has a right to work in an environment free from racial prejudice. If the plaintiff has proven by a preponderance of the evidence that she was subjected to racial harassment by her manager while employed at the defendant, or that she was subjected to a work environment not free from racial prejudice which was either created or condoned by the defendant, then it would be your duty to find for plaintiff on this issue." 1 Record, Doc. No. 18, p. 4 (emphasis added).

Without passing on the contents of this instruction, it is plain to us that what petitioner is attacking are the conditions of her employment.

This type of conduct, reprehensible though it be if true, is not actionable under § 1981, which covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process. Rather, such conduct is actionable under the more expansive reach of Title VII of the Civil Rights Act of 1964. The latter statute makes it unlawful for an employer to "discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment." 42 U.S.C. § 2000e-2(a)(1). Racial harassment in the course of employment is actionable under Title VII's prohibition against discrimination in the "terms, conditions, or privileges of employment." "[T]he [Equal Employment Opportunity Commission (EEOC) ] has long recognized that harassment on the basis of race . . . is an unlawful employment practice in violation of § 703 of Title VII of the Civil Rights Act." See 2 EEOC Compliance Manual § 615.7 (1982). While this Court has not yet had the opportunity to pass directly upon this interpretation of Title VII, the lower federal courts have uniformly upheld this view, ^[3] and we implicitly have approved it in a recent decision concerning sexual harassment, Meritor Savings Bank v. Vinson, 477 U.S. 57, 65-66, 106 S.Ct. 2399, 2404-2405, 91 L.Ed.2d 49 (1986) As we said in that case, "harassment [which is] sufficiently severe or pervasive 'to alter the conditions of [the victim's] employment and create an abusive working environment,' " id., at 67 (citation omitted), 106 S.Ct., at 2405, is actionable under Title VII because it "affects a 'term, condition, or privilege' of employment," ibid.

Interpreting § 1981 to cover postformation conduct unrelated to an employee's right to enforce his or her contract, such as incidents relating to the conditions of employment, is not only inconsistent with that statute's limitation to the making and enforcement of contracts, but would also undermine the detailed and well-crafted procedures for conciliation and resolution of Title VII claims. In Title VII, Congress set up an elaborate administrative procedure, implemented through the EEOC, that is designed to assist in the investigation of claims of racial discrimination in the workplace and to work towards the resolution of these claims through conciliation rather than litigation. See 42 U.S.C. § 2000e-5(b). Only after these procedures have been exhausted, and the plaintiff has obtained a "right to sue" letter from the EEOC, may he or she bring a Title VII action in court. See 42 U.S.C. § 2000e-5(f)(1). Section 1981, by contrast, provides no administrative review or opportunity for conciliation.

Where conduct is covered by both § 1981 and Title VII, the detailed procedures of Title VII are rendered a dead letter, as the plaintiff is free to pursue a claim by bringing suit under § 1981 without resort to those statutory prerequisites. We agree that, after Runyon, there is some necessary overlap between Title VII and § 1981, and that where the statutes do in fact overlap we are not at liberty "to infer any positive preference for one over the other." Johnson v. Railway Express Agency, Inc., 421 U.S., at 461, 95 S.Ct., at 1721. We should be reluctant, however, to read an earlier statute broadly where the result is to circumvent the detailed remedial scheme constructed in a later statute. See United States v. Fausto, 484 U.S. 439, 108 S.Ct. 668, 98 L.Ed.2d 830 (1988). That egregious racial harassment of employees is forbidden by a clearly applicable law (Title VII), moreover, should lessen the temptation for this Court to twist the interpretation of another statute (§ 1981) to cover the same conduct. In the particular case before us, we do not know for certain why petitioner chose to pursue only remedies under § 1981, and not under Title VII. See 805 F.2d, at 1144, n.; Tr. of Oral Arg. 15-16, 23 (Feb. 29, 1988). But in any event, the availability of the latter statute should deter us from a tortuous construction of the former statute to cover this type of claim.

By reading § 1981 not as a general proscription of racial discrimination in all aspects of contract relations, but as limited to the enumerated rights within its express protection, specifically the right to make and enforce contracts, we may preserve the integrity of Title VII's procedures without sacrificing any significant coverage of the civil rights laws. ^[4] Of course, some overlap will remain between the two statutes: specifically, a refusal to enter into an employment contract on the basis of race. Such a claim would be actionable under Title VII as a "refus[al] to hire" based on race, 42 U.S.C. § 2000e-2(a), and under § 1981 as an impairment of "the same right . . . to make . . . contracts . . . as . . . white citizens," 42 U.S.C. § 1981. But this is precisely where it would make sense for Congress to provide for the overlap. At this stage of the employee-employer relation Title VII's mediation and conciliation procedures would be of minimal effect, for there is not yet a relation to salvage.

The Solicitor General and Justice BRENNAN offer two alternative interpretations of § 1981. The Solicitor General argues that the language of § 1981, especially the words "the same right," requires us to look outside § 1981 to the terms of particular contracts and to state law for the obligations and covenants to be protected by the federal statute. Under this view, § 1981 has no actual substantive content, but instead mirrors only the specific protections that are afforded under the law of contracts of each State. Under this view, racial harassment in the conditions of employment is actionable when, and only when, it amounts to a breach of contract under state law. We disagree. For one thing, to the extent that it assumes that prohibitions contained in § 1981 incorporate only those protections afforded by the States, this theory is directly inconsistent with Runyon, which we today decline to overrule. A more fundamental failing in the Solicitor's argument is that racial harassment amounting to breach of contract, like racial harassment alone, impairs neither the right to make nor the right to enforce a contract. It is plain that the former right is not implicated directly by an employer's breach in the performance of obligations under a contract already formed. Nor is it correct to say that racial harassment amounting to a breach of contract impairs an employee's right to enforce his contract. To the contrary, conduct amounting to a breach of contract under state law is precisely what the language of § 1981 does not cover. That is because, in such a case, provided that plaintiff's access to state court or any other dispute resolution process has not been impaired by either the State or a private actor, see Goodman v. Lukens Steel Co., 482 U.S. 656, 107 S.Ct. 2617, 96 L.Ed.2d 572 (1987), the plaintiff is free to enforce the terms of the contract in state court, and cannot possibly assert, by reason of the breach alone, that he has been deprived of the same right to enforce contracts as is enjoyed by white citizens.

In addition, interpreting § 1981 to cover racial harassment amounting to a breach of contract would federalize all state-law claims for breach of contract where racial animus is alleged, since § 1981 covers all types of contracts, not just employment contracts. Although we must do so when Congress plainly directs, as a rule we should be and are "reluctant to federalize" matters traditionally covered by state common law. Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 479, 97 S.Ct. 1292, 1304, 51 L.Ed.2d 480 (1977); see also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 507, 105 S.Ct. 3275, 3295-96, 87 L.Ed.2d 346 (1985) (MARSHALL, J., dissenting). By confining § 1981 to the impairment of the specific rights to make and enforce contracts, Congress cannot be said to have intended such a result with respect to breach of contract claims. It would be no small paradox, moreover, that under the interpretation of § 1981 offered by the Solicitor General, the more a State extends its own contract law to protect employees in general and minorities in particular, the greater would be the potential displacement of state law by § 1981. We do not think § 1981 need be read to produce such a peculiar result.

Justice BRENNAN, for his part, would hold that racial harassment is actionable under § 1981 when "the acts constituting harassment [are] sufficiently severe or pervasive as effectively to belie any claim that the contract was entered into in a racially neutral manner." See post, at 208. We do not find this standard an accurate or useful articulation of which contract claims are actionable under § 1981 and which are not. The fact that racial harassment is "severe or pervasive" does not by magic transform a challenge to the conditions of employment, not actionable under § 1981, into a viable challenge to the employer's refusal to make a contract. We agree that racial harassment may be used as evidence that a divergence in the explicit terms of particular contracts is explained by racial animus. ^[5] Thus, for example, if a potential employee is offered (and accepts) a contract to do a job for less money than others doing like work, evidence of racial harassment in the workplace may show that the employer, at the time of formation, was unwilling to enter into a nondiscriminatory contract. However, and this is the critical point, the question under § 1981 remains whether the employer, at the time of the formation of the contract, in fact intentionally refused to enter into a contract with the employee on racially neutral terms. The plaintiff's ability to plead that the racial harassment is "severe or pervasive" should not allow him to bootstrap a challenge to the conditions of employment (actionable, if at all, under Title VII) into a claim under § 1981 that the employer refused to offer petitioner the "same right to . . . make" a contract. We think it clear that the conduct challenged by petitioner relates not to her employer's refusal to enter into a contract with her, but rather to the conditions of her employment. ^[6]

Petitioner's claim that respondent violated § 1981 by failing to promote her, because of race, to a position as an intermediate accounting clerk is a different matter. As a preliminary point, we note that the Court of Appeals distinguished between petitioner's claims of racial harassment and discriminatory promotion, stating that although the former did not give rise to a discrete § 1981 claim, "[c]laims of racially discriminatory . . . promotion go to the very existence and nature of the employment contract and thus fall easily within § 1981's protection." 805 F.2d, at 1145. We think that somewhat overstates the case. Consistent with what we have said in Part III, supra, the question whether a promotion claim is actionable under § 1981 depends upon whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer. If so, then the employer's refusal to enter the new contract is actionable under § 1981. In making this determination, a lower court should give a fair and natural reading to the statutory phrase "the same right . . . to make . . . contracts," and should not strain in an undue manner the language of § 1981. Only where the promotion rises to the level of an op ortunity for a new and distinct relation between the employee and the employer is such a claim actionable under § 1981. Cf. Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (refusal of law firm to accept associate into partnership) (Title VII). Because respondent has not argued at any stage that petitioner's promotion claim is not cognizable under § 1981, we need not address the issue further here.

This brings us to the question of the District Court's jury instructions on petitioner's promotion claim. We think the District Court erred when it instructed the jury that petitioner had to prove that she was better qualified than the white employee who allegedly received the promotion. In order to prevail under § 1981, a plaintiff must prove purposeful discrimination. General Building Contractors Assn., Inc. v. Pennsylvania, 458 U.S. 375, 391, 102 S.Ct. 3141, 3150, 73 L.Ed.2d 835 (1982). We have developed, in analogous areas of civil rights law, a carefully designed framework of proof to determine, in the context of disparate treatment, the ultimate issue whether the defendant intentionally discriminated against the plaintiff. See Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). We agree with the Court of Appeals that this scheme of proof, structured as a "sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination," Furnco Construction Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949-50, 57 L.Ed.2d 957 (1978), should apply to claims of racial discrimination under § 1981.

Although the Court of Appeals recognized that the McDonnell Douglas/ Burdine scheme of proof should apply in § 1981 cases such as this one, it erred in describing petitioner's burden. Under our well-established framework, the plaintiff has the initial burden of proving, by a preponderance of the evidence, a prima facie case of discrimination. Burdine, 450 U.S., at 252-253, 101 S.Ct., at 1093-1094. The burden is not onerous. Id., at 253, 101 S.Ct., at 1093-94. Here, petitioner need only prove by a preponderance of the evidence that she applied for and was qualified for an available position, that she was rejected, and that after she was rejected respondent either continued to seek applicants for the position, or, as is alleged here, filled the position with a white employee. See id., at 253, and n. 6, 101 S.Ct., at 1094, and n. 6; McDonnell Douglas, supra, 411 U.S., at 802, 93 S.Ct., at 1824. ^[7]

Once the plaintiff establishes a prima facie case, an inference of discrimination arises. See Burdine, 450 U.S., at 254, 101 S.Ct., at 1094. In order to rebut this inference, the employer must present evidence that the plaintiff was rejected, or the other applicant was chosen, for a legitimate nondiscriminatory reason. See ibid. Here, respondent presented evidence that it gave the job to the white applicant because she was better qualified for the position, and therefore rebutted any presumption of discrimination that petitioner may have established. At this point, as our prior cases make clear, petitioner retains the final burden of persuading the jury of intentional discrimination. See id., at 256, 101 S.Ct., at 1095.

Although petitioner retains the ultimate burden of persuasion, our cases make clear that she must also have the opportunity to demonstrate that respondent's proffered reasons for its decision were not its true reasons. Ibid. In doing so, petitioner is not limited to presenting evidence of a certain type. This is where the District Court erred. The evidence which petitioner can present in an attempt to establish that respondent's stated reasons are pretextual may take a variety of forms. See McDonnell Douglas, supra, 411 U.S., at 804-805, 93 S.Ct., at 1825-1826; Furnco Construction Corp., supra, 438 U.S., at 578, 98 S.Ct., at 2950; cf. United States Postal Service Bd. of Governors v. Aikens, 460 U.S. 711, 714, n. 3, 103 S.Ct. 1478, 1481, n. 3, 75 L.Ed.2d 403 (1983). Indeed, she might seek to demonstrate that respondent's claim to have promoted a better qualified applicant was pretextual by showing that she was in fact better qualified than the person chosen for the position. The District Court erred, however, in instructing the jury that in order to succeed petitioner was required to make such a showing. There are certainly other ways in which petitioner could seek to prove that respondent's reasons were pretextual. Thus, for example, petitioner could seek to persuade the jury that respondent had not offered the true reason for its promotion decision by presenting evidence of respondent's past treatment of petitioner, including the instances of the racial harassment which she alleges and respondent's failure to train her for an accounting position. See supra, at 178. While we do not intend to say this evidence necessarily would be sufficient to carry the day, it cannot be denied that it is one of the various ways in which petitioner might seek to prove intentional discrimination on the part of respondent. She may not be forced to pursue any particular means of demonstrating that respondent's stated reasons are pretextual. It was, therefore, error for the District Court to instruct the jury that petitioner could carry her burden of persuasion only by showing that she was in fact better qualified than the white applicant who got the job.

The law now reflects society's consensus that discrimination based on the color of one's skin is a profound wrong of tragic dimension. Neither our words nor our decisions should be interpreted as signaling one inch of retreat from Congress' policy to forbid discrimination in the private, as well as the public, sphere. Nevertheless, in the area of private discrimination, to which the ordinance of the Constitution does not directly extend, our role is limited to interpreting what Congress may do and has done. The statute before us, which is only one part of Congress' extensive civil rights legislation, does not cover the acts of harassment alleged here.

In sum, we affirm the Court of Appeals' dismissal of petitioner's racial harassment claim as not actionable under § 1981. The Court of Appeals erred, however, in holding that petitioner could succeed in her discriminatory promotion claim under § 1981 only by proving that she was better qualified for the position of intermediate accounting clerk than the white employee who in fact was promoted. The judgment of the Court of Appeals is therefore vacated insofar as it relates to petitioner's discriminatory promotion claim, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Notes

1. Justice BRENNAN chides us for ignoring what he considers "two very obvious reasons" for adhering to Runyon. Post, at 191. First, he argues at length that Runyon was correct as an initial matter. See post, at 191-199. As we have said, however, see supra, 171-172, it is unnecessary for us to address this issue because we agree that, whether or not Runyon was correct as an initial matter, there is no special justification for departing here from the rule of stare decisis.
2. In addition, another of respondent's managers testified that when he recommended a different black person for a position as a data processor, petitioner's supervisor stated that he did not "need any more problems around here," and that he would "search for additional people who are not black." Tr. 2-160 to 2-161.
3. See, e.g., Firefighters Institute for Racial Equality v. St. Louis, 549 F.2d 506, 514-515 (CA8), cert. denied sub nom. Banta v. United States, 434 U.S. 819, 98 S.Ct. 60, 54 L.Ed.2d 76 (1977); Rogers v. EEOC, 454 F.2d 234 (CA5 1971), cert. denied, 406 U.S. 957, 92 S.Ct. 2058, 32 L.Ed.2d 343 (1972).
4. Unnecessary overlap between Title VII and § 1981 would also serve to upset the delicate balance between employee and employer rights struck by Title VII in other respects. For instance, a plaintiff in a Title VII action is limited to a recovery of backpay, whereas under § 1981 a plaintiff may be entitled to plenary compensatory damages, as well as punitive damages in an appropriate case. Both the employee and employer will be unlikely to agree to a conciliatory resolution of the dispute under Title VII if the employer can be found liable for much greater amounts under § 1981.
5. This was the permissible use of evidence of racial harassment that the Fourth Circuit, in its decision below, envisioned for § 1981 cases. See 805 F.2d 1143, 1145 (CA4 1986).
6. In his separate opinion, Justice STEVENS construes the phrase "the same right . . . to make . . . contracts" with ingenuity to cover various postformation conduct by the employer. But our task here is not to construe § 1981 to punish all acts of discrimination in contracting in a like fashion, but rather merely to give a fair reading to scope of the statutory terms used by Congress. We adhere today to our decision in Runyon that § 1981 reaches private conduct, but do not believe that holding compels us to read the statutory terms "make" and "enforce" beyond their plain and common-sense meaning. We believe that the lower courts will have little difficulty applying the straightforward principles that we announce today.
7. Here, respondent argues that petitioner cannot make out a prima facie case on her promotion claim because she did not prove either that respondent was seeking applicants for the intermediate accounting clerk position or that the white employee named to fill that position in fact received a "promotion" from her prior job. Although we express no opinion on the merits of these claims, we do emphasize that in order to prove that she was denied the same right to make and enforce contracts as white citizens, petitioner must show, inter alia, that she was in fact denied an available position.