terminable at will

Brenda Patterson, a black woman, began her employment with McLean Credit Union in May 1972 as a teller and file coordinator in North Carolina. She remained in that position until July 1982, when the credit union laid her off. After her termination, Patterson commenced an action in the United States District Court for the Middle District of North Carolina, alleging that McLean Credit Union had harassed her, failed to promote her to an intermediate accounting clerk position, and discharged her, all because of her race, in violation of 42 U.S.C. § 1981. She also asserted a state-law claim for intentional infliction of emotional distress under North Carolina tort law. The District Court ruled that a claim for racial harassment is not actionable under § 1981 and declined to submit that portion of the case to the jury. The jury received and deliberated upon Patterson's § 1981 claims alleging discrimination in her discharge and the failure to promote her, returning verdicts for the employer on both claims. The District Court directed a verdict for the employer on the state tort claim, concluding that the employer's conduct did not rise to the level of outrageousness required under North Carolina law. In the Court of Appeals for the Fourth Circuit, Patterson challenged the District Court's refusal to submit her § 1981 racial harassment claim to the jury. She also argued that the District Court had erred in instructing the jury that she must show she was better qualified than the white employee promoted in her place. The Court of Appeals affirmed the District Court's judgment in full, holding that racial harassment does not abridge the right to make and enforce contracts under § 1981, while upholding the jury instruction on the promotion claim. The Supreme Court granted certiorari to decide whether Patterson's racial harassment claim is actionable under § 1981 and whether the jury instruction on her promotion claim was erroneous. After oral argument on these issues, the Court 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 (1976), should be reconsidered.

In June 1960, while students at Grinnell College in Iowa, Victoria Hewitt became pregnant by Robert Hewitt. Robert told Victoria that they were husband and wife and would live as such without a formal ceremony, and that he would share his life, future, earnings, and property with her. The parties announced to their parents that they were married and held themselves out as husband and wife thereafter. Victoria devoted her efforts to Robert's professional education in pedodontia, obtaining financial assistance from her parents, and assisted in his career by placing her payroll checks into a common fund. Three children were born to the parties during their relationship, which lasted until 1975. By that time, Robert earned over $80,000 a year and had accumulated substantial property, some held jointly and some separately. Victoria initially filed a complaint for divorce, but at a hearing on Robert's motion to dismiss, she admitted that no marriage ceremony had taken place and that the parties had never obtained a marriage license. The trial court dismissed the complaint, finding no ceremonial or common law marriage existed, and directed Victoria to make her complaint more definite regarding the property. Victoria then filed an amended complaint alleging an express oral contract to share property, an implied contract from the parties' conduct, a constructive trust based on fraudulent assurances, and unjust enrichment from her detrimental reliance. The trial court dismissed the amended complaint, finding that Illinois law and public policy require such claims to be based on a valid marriage. The appellate court reversed, and the Supreme Court of Illinois granted leave to appeal.

Cheryl Churchill worked as a nurse in the obstetrics department at McDonough District Hospital, which was operated by petitioners including the State of Illinois and hospital officials Cynthia Waters, Kathleen Davis, and Stephen Hopper. On January 16, 1987, during a dinner break at work, Churchill spoke with Melanie Perkins-Graham, another nurse considering a transfer to the obstetrics department, and the conversation was partially overheard by nurses Mary Lou Ballew and Jean Welty and by Dr. Thomas Koch, the clinical head of obstetrics. A few days later, Ballew reported to Waters that Churchill had taken Perkins-Graham aside for at least twenty minutes to criticize Waters and describe how bad things were in obstetrics, causing Perkins-Graham to lose interest in the transfer, after which Waters and Davis interviewed Perkins-Graham, who confirmed that Churchill had made unkind and inappropriate negative comments about Waters and Davis, and they also interviewed Ballew a second time for confirmation. Churchill's account differed because she stated that the conversation had primarily concerned the hospital's cross-training policy, which she believed was designed only to cover staff shortages and threatened patient care, and she had defended Waters while encouraging Perkins-Graham to transfer; Koch's and Welty's recollections matched Churchill's version, although Churchill had previously complained about the cross-training policy to Davis and Waters. Waters and Davis never spoke with Koch or Welty, and after receiving the reports the hospital discharged Churchill. Churchill filed an internal grievance, Hopper met with Churchill to hear her side of the story, reviewed the written reports from Waters and Davis, and directed Bernice Magin to interview Ballew one more time before denying the grievance. Churchill then sued petitioners under 42 U.S.C. § 1983 in the United States District Court for the Central District of Illinois. The district court granted summary judgment to petitioners. The Court of Appeals for the Seventh Circuit reversed. The Supreme Court granted certiorari.