Section 1981 and Title VII are both federal laws in the United States that address workplace discrimination. However, while the standards of liability are identical, there is a major difference in the coverage of the two provisions.Section 1981 does not require an EEOC Charge to be filed. Both Title VII and Texas Labor Code Chapter 21 have damages caps that apply whereas 42 U.S.C. Section 1981 does not have a comparable damage cap. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin. Of Community Affairs v. 147. Title VII and Section 1981 racial discrimination claims in Texas; Section 1981 only applies to race and ethnicity as a basis for employment discrimination. Section 1981 grants individuals the right to make and enforce contracts, regardless of race. Title VII prohibits employment discrimination because of "color" as a basis separately listed in the statute. (1) provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments (42 U.S.C. Section 2000e et seq.);.