United States v. Burke

Summary

Justice Blackmun, joined by Chief Justice Rehnquist and Justices White, Stevens, and Kennedy, held that backpay received in settlement of claims under Title VII as it existed before the 1991 amendments is not excludable from gross income under § 104(a)(2). Although that provision encompasses physical and nonphysical personal injuries, unamended Title VII's restricted remedies did not redress a tort-like personal injury. Justice Scalia concurred in the judgment alone, reasoning that the exclusion covers injuries to physical or mental health and that entitlement to Title VII backpay does not depend on such injuries. Justice Souter separately concurred in the judgment, finding competing tort and contract analogies inconclusive and applying the rule that income exclusions must be narrowly construed. Justice O'Connor, joined by Justice Thomas, dissented, arguing that the nature of the rights protected, rather than the remedies available, makes Title VII claims tort-like and their proceeds excludable.