In Patterson v. McLean Credit Union (1988), the U.S. Supreme Court ruled that a private employer's racial harassment of an employee was not covered under Section 1981 of the Civil Rights Act of 1866, which guarantees equal rights in making and enforcing contracts to all citizens. The case involved Brenda Patterson, who alleged she had been subjected to racial discrimination and harassment by her employer, McLean Credit Union. She claimed this violated Section 1981 as it impaired her ability to perform on her job contract equally with white employees. However, the court held that while Section 1981 covers refusal or termination of contracts based on race, it does not cover problems arising later such as workplace conditions or quality-of-life issues after employment has begun.

In the dissenting opinion for Patterson v. McLean Credit Union, Justice Brennan disagreed with the majority's interpretation of Section 1981 of the Civil Rights Act of 1866. He argued that this law should cover not only contract formation but also problems arising after contracts are made, including harassment and wrongful termination based on race. According to him, such an interpretation would be consistent with both historical context and precedent cases like Runyon v. McCrary (1976). Furthermore, he criticized the majority for ignoring legislative history showing Congress intended a broad application when it reenacted Section 1981 in 1870 and again in 1991. Lastly, he expressed concern about how narrowing its scope could undermine civil rights protections by leaving victims without federal remedies unless they can prove intentional discrimination under Title VII.