In Patterson v. McLean Credit Union, the Supreme Court was asked to determine whether a claim of racial harassment could be brought under Section 1981 of the Civil Rights Act of 1866. The plaintiff, Brenda Patterson, alleged that her employer had subjected her to various racially discriminatory practices and sought damages for emotional distress and loss of earnings. However, in a split decision (5-4), the court held that while Section 1981 prohibits racial discrimination in making and enforcing contracts, it does not cover conduct after contract formation such as harassment on the job or termination conditions. Therefore, Patterson's claims related to workplace treatment were dismissed but she was allowed to pursue allegations regarding promotion denial due to race since this involved an opportunity for new contractual relationship.

In the dissenting opinion for Patterson v. McLean Credit Union, Justice Brennan argued that Section 1981 should be interpreted to cover racial harassment in private employment contracts. He contended that the majority's narrow interpretation of this law was inconsistent with its historical context and purpose, which was to ensure equal rights for all citizens regardless of race. Furthermore, he criticized the majority's reliance on a strict textual analysis while ignoring legislative history and prior judicial interpretations supporting a broader reading of Section 1981. In his view, such an approach undermined Congress' intent to eradicate racial discrimination in all aspects of contract relations including performance, enforcement and termination stages - not just at formation stage as held by the majority. Lastly, he expressed concern that this decision would leave victims without any federal remedy against ongoing racial harassment at work since Title VII remedies were often inadequate due to caps on damages and short filing deadlines.