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April 16, 1990

JOAN BRERETON, et al., Plaintiffs,

The opinion of the court was delivered by: RICHEY

 This is yet another one of the many § 1981 employment discrimination cases that must be completely re-evaluated in light of the Supreme Court's intervening decision in Patterson v. McLean Credit Union, 491 U.S. 164, 105 L. Ed. 2d 132, 109 S. Ct. 2363 (1989). Suing in their individual capacities and on behalf of a class of similarly-situated persons, *fn1" the seven black plaintiffs allege that the defendant engaged in "a pattern or practice" of intentional race discrimination in hiring and internal employment matters in violation of § 1981. Reacting to Patterson, the defendant has filed a motion to dismiss most of the plaintiffs' claims. In addition to opposing this motion to dismiss, the plaintiffs have filed a motion for leave to amend their complaint. Compelled by Patterson and its progeny, the Court will grant in part and deny in part the defendant's motion to dismiss and will grant in part and deny in part the plaintiffs' motion for leave to amend.

 I. Background

 In bringing this lawsuit against the defendant for its alleged employment discrimination, the plaintiffs elected not to pursue potentially viable remedies under Title VII, 42 U.S.C. § 2000e, et seq. and decided instead to rely exclusively on the Civil Rights Act of 1866, 42 U.S.C. § 1981. After the plaintiffs filed their complaint, the defendant answered, and the parties filed various pre-trial motions and engaged in extensive discovery on class-related issues. Upon the parties' request, the Court stayed these proceedings when it became clear that the Supreme Court's impending decision in Patterson could materially affect the balance of these proceedings.

 The plaintiffs bring various charges that, liberally construed in their favor, can be loosely grouped into four kinds of discrimination claims: (1) on-the-job working condition disparities in compensation, benefits, evaluations, assignments, and/or training (plaintiffs Gloria Ford, Charlotte Scott, and Alvin Walker); (2) discharges and/or "reductions-in-force" (plaintiffs Joan Brereton, Betty Harris Poteat, Etta Waldron, Scott, and Walker); (3) promotion denials (plaintiffs Ford and Waldron); and (4) a refusal to hire (plaintiff Sylvia Wood). The plaintiffs also assert these claims on behalf of the class.

 II. Analysis

 A threshold issue is whether the Court should even re-evaluate this case in light of Patterson because to do so would be a retroactive application of a Supreme Court case decided after the plaintiffs filed a complaint in reliance upon pre-Patterson § 1981 jurisprudence. However, no matter how unfair the result may seem to the plaintiffs, the Court is constrained by Patterson's binding authority. This Court cannot ignore that the Supreme Court has retroactively applied the Patterson holding, both in Patterson itself and in other cases before the Court. See Pullman-Standard, Inc. v. Swint, 493 U.S. 929, 107 L. Ed. 2d 307, 110 S. Ct. 316 (1990) (granting certiorari, vacating appellate court's judgment, and remanding in light of Patterson); Bhandari v. First Nat'l Bank of Commerce, 492 U.S. 901, 106 L. Ed. 2d 558, 109 S. Ct. 3207 (1989) (same). Moreover, there is overwhelming authority from the lower federal courts that Patterson should be applied retroactively. *fn2" Considering this great weight of authority, the Court sees no reason not to apply Patterson to this case, especially since retroactivity concerns are less significant in the instant case, which is still in its relatively early stages, than in many other cases that already had progressed through a final decision and were pending on appeal only to be affected by a retroactive application of Patterson.

 Another preliminary matter is that the defendant's motion seeks the dismissal of most, but not all, of the plaintiffs' claims. The defendant does not contend that the plaintiff Woods' claim based upon its allegedly discriminatory refusal to hire her must be dismissed, apparently recognizing correctly that "a refusal to enter into an employment contract on the basis of race" is a claim that "would be actionable under . . . § 1981 as an impairment of 'the same right . . . to make . . . contracts . . . as . . . white citizens.'" Patterson, 491 U.S. 164, 105 L. Ed. 2d 132, 109 S. Ct. 2363, 2375 (1989). Therefore, the Court will put to one side the Wood refusal-to-hire claim and will address herein the other claims constituting the bulk of the plaintiffs' complaint.

 A. "Hostile Work Environment" Claims

 While the plaintiffs do not allege acts of blatant, crude racial harassment (for example, name-calling and pejorative stereotyping), the plaintiffs do accuse the defendant of engaging in a more subtle form of race discrimination. They contend that the defendant violated § 1981 by creating what was in effect a hostile work environment in which black employees received less favorable compensation and benefits packages, evaluations, and training and work assignments than their white colleagues.

 However, it is well-established after Patterson that § 1981 is not the proper remedy for claims based upon racially discriminatory working conditions imposed after formation of the employment contract. The Supreme Court went to great pains to emphasize the limited scope of § 1981:

The most obvious feature of [§ 1981] 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.

 Patterson, 109 S. Ct. at 2372. The Patterson Court went on to note that "the right to make contracts does not extend . . . 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 " and that "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." Id. at 2373 (emphasis added). Consequently, lower federal courts have applied Patterson to hold that allegations of discrimination based upon an employer's racial harassment or an employer's creating or tolerating a hostile work environment are insufficient to state a claim under § 1981. See, e.g., Risinger v. Ohio Bureau of Workers' Compensation, 883 F.2d 475, 479 (6th Cir. 1989); Lynch v. Belden & Co., 882 F.2d 262, 266-67 (7th Cir. 1989), cert. denied, 493 U.S. 1080, 110 S. Ct. 1134, 107 L. Ed. 2d 1040 (1990); Matthews v. Freedman, 882 F.2d 83, 85 (3d Cir. 1989); Brooms v. Regal Tube Co., 881 F.2d 412, 424 (7th Cir. 1989).

 In light of the authority discussed above, the Court must dismiss the plaintiffs' claims based on their discriminatory work environment allegations. "This type of conduct, reprehensible though it be if true, is not actionable under § 1981," Patterson, 109 S. Ct. at 2374, because it allegedly occurred after the formation of an employment contract, see id. at 2372 (§ 1981's protection "extends only to the formation ...

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