(On the Right of Refusal By Businesses — Inspired by Business Ethics Course)

“We reserve the right to refuse service” is a sign commonly spotted upon entry into a business. But what what does that imply? Spurred by the civil rights movements and the repeal of the discriminatory Jim Crow laws, society was forced to question the freedom of business’ to engage, or to not engage, in a transaction with whomever they want. Naturally, this also brings into question the role of the government — that is, if the government should have a role at all. This article will present the argument for businesses to have the freedom to choose who they do business with.

The key pieces of legislation relevant in this discussion are the Civil Rights Act of 1964 and the Americans With Disabilities Act. One cannot discuss the Civil Rights Act of 1964 independent of the society and legislation that existed in America before its introduction. Before the Civil War, there was no need for codified discriminatory practices since government condoned slavery had already put colored individuals so below their white contemporaries (Urofsky). Society had no doubt that African Americans were inherently unequal. Interestingly enough, following the emancipation of slaves in the South, there were very few laws that were actually passed to institutionalize a form of segregation (Urofsky). Texas, for example, had laws that required trains to have at least one car that was designated for colored individuals, but on the other hand, the public education system that was being set up in the South was largely fully integrated. New Orleans had fully integrated schools until 1877 and North Carolina had African Americans frequently sit alongside white peers on juries (Urofsky). A fascinating aspect of antebellum America that is often glossed over. A strata of time giving a case study on a society that absolutely was racist, but exhibiting unexpectedly low amounts of segregation given no legal consent.

Unfortunately, this did not last. Each state after another began passing laws institutionalizing segregation and discrimination, with the infamous Civil Rights act of 1875 sanctioning “separate, but equal” facilities. An important incident occurred when Mr. Homer Plessy went into a New Orleans train station, bought a first class ticket, and began to board the train on the first class car. Naturally, the conductor asked if Mr. Plessy was a colored man, and upon affirmation, redirected him to the designated car — effectively not allowing him to board the train car that he had purchased a ticket for. Mr. Plessy then stated “I am an American citizen. I have paid for a first-class ticket, and intend to ride to Covington in the first-class car.” Unfortunately, not a valid argument. The train was stopped, a detective came on board, dragged Mr. Plessy off the train and arrested him. It is important to note, and will be referenced later on in this paper, that what just occurred was an act of sanctioned violence that could’ve only been done by the state. A government respecting private property and business transaction, even if it were racist, would not have the jurisdiction to engage in violence against Mr. Plessy. Mr. Plessy attempted to sue in court, but given the existence of certain state laws, he lost (Who Were Plessy and Ferguson? African American History Blog). After this hallmark incident, African Americans rapidly began losing even more of their rights. From 1877 to the mid 1950s, state and federal level laws were legislated specifically to allow for the use of violence against colored people. These laws, dubbed the “Jim Crow” laws, are a stain on the moral fabric of American society.

The aforementioned Civil Rights Act of 1964 was made law in order to undo these state-sanctioned injustices. According to Ms. Jane Haskin J.D., the Civil Rights Act of 1964 was a federal law that “prohibits discrimination by privately owned places of public accommodation on the basis of race, color, religion or national origin. Places of ‘public accommodation’ include hotels, restaurants, theaters, banks, health clubs and stores. Nonprofit organizations such as churches are generally exempt from the law.” The law does not prohibit discrimination on the basis of sexual orientation, a fact which was brought to public attention when a Christian baker in Colorado refused to bake a cake for a gay wedding. Even though there is no such protection at the federal level, twenty states have passed laws that expand upon the wording of the Civil Rights Act to include sexual orientation. Similarly enough, the Americans with Disabilities Act does not allow businesses to discriminate against individuals with disabilities. Businesses still have the right of refusal in certain situations, specifically when discrimination is necessary for health reasons and is not a unique aspect of the aforementioned special groups. A commendable piece of legislation by all means. This paper does not make the claim that the Civil Rights Act of 1965 was specifically a bad law, rather asserts that the broader class of laws that govern the freedom of association should be critically examined because of the dangers they present. We can not only look at the times laws have done good for society.

Attempting to legislate morality introduces a huge gray area in governance. Morality is an abstract concept that is highly personal and, at a societal level, always changing. Consider Alabama’s newly elected governor Mr. George Wallace, the man infamous for delivering the quote “Segregation now, segregation tomorrow, segregation forever” in his 1963 inaugural address. It would be incredibly myopic to think that Mr. Wallace knew he was wrong, that he knew what he was doing wasn’t moral. More likely, he genuinely believed that segregation was good for society, was moral, and that the existing laws promoting discrimination were not evil. It wouldn’t be much of an extrapolation to think that Senators and Congressman who enacted the series of Jim Crow laws felt the same exact way. They thought they were doing right. The danger becomes clear when one considers that since they were government representatives, they could enforce their views on morality with violence upon society. Through state sponsored violence they took away the rights of the African American man, woman, and child. It was through violence that slavery existed and the trans-Atlantic human shipping routes stayed in business. It was because men, who had the power of a police force and army, could dictate what was considered good in a society and then enforce it with guns to institute policies as reprehensible as the ones colored individuals experienced in the 20th century.

It would be overly dramatic to consider the effects of the Jim Crow laws equal to the laws forcing a Christian baker to partake in business transactions that are against their values, but they both stand on the same legal ground. Should not morality, which is highly personal and societally volatile by nature, be left to the individual? Even Mr. Wallace, in earlier parts of his inaugural address, considered the repeal of segregation laws and the inclusivity of African Americans in historically white-only institutions, as tyrannical. Furthermore, in 1979, during an address to a Baptist Church, Mr. Wallace said “I have learned what suffering means. In a way that was impossible, I think I can understand something of the pain black people have come to endure. I know I contributed to that pain, and I can only ask your forgiveness.” The irony could not be more evident. Going back to the previous case with Mr. Homer Plessy, it is worth considering if the train conductor and other racist passengers would’ve themselves used violence to force Mr. Plessy out, even absent approving laws. To give an unequivocal “no” would be naive, but at the very least he would have not lost the following court case and could at least be compensated for his ticket and attempt to sue the train company that harassed him. Speculating on the success of that lawsuit would only distract from the core argument, but at the minimum he would have some legal standing on which he could do so. There would be some recognition of his value as a person.

Getting away from the philosophical and into the practical what would happen if businesses could freely discriminate with whom they do business with? This paper is not at all suggesting the repeal of the Civil Rights Act, because to think that the free market could correct for the racism that existed at the time would be an insult to the trials endured by those marginalized. With the recent legalization of gay marriage, many Christian business owners are denying gay customers their service due to the conflict between moral values. Should the government allow this type of discrimination to occur? Because this becomes an incredibly personal and moral issue for some business owners, it would be destructive for the government to coerce them to have to perform actions that they view as antagonistic to their fundamental value system. In the words of Mr. Robert A. Levy, “Individuals and business owners should be able to serve, or not serve, anyone they please — guided by the marketplace and constrained by competition.”

Consider a competitive bakery market where one bakery refuses to do business with gay people. The Gallup poll estimates that 3.8% of all Americans identify as LGBQT. Through their refusal, the bakery voluntarily gives up, on average, nearly 4% of the population. Other bakeries in this competitive market then have the opportunity to capture that lost share, by doing absolutely nothing besides being accepting. Furthermore, if other customers are insulted by such “bigoted” behavior by the previous bakery, they have the freedom to not want to do business with them. Given the outrage from the aforementioned incident, this is a non-trivial amount of the population, which would be another revenue hit to the offending bakery. If they are willing to take such a hit on their top line simply to do what they think is right, who is the government to step in and force them to act in any other fashion?

Naturally, this viewpoint has spawned controversy. Most opposing opinion is some permutation of a fear of society returning to segregation and widespread oppression of minorities. The concern is understandable, but government action is a naive solution. As evidence dissenters would point to the discrimination that existed in the 20th century towards women and colored people, but that argument is obfuscated by other factors at the time. These being corrupt police, racist judges, and utilities being denied to facilities that supported integration (Levy). None of those factors would be assuaged with further legislation. While unfortunate, they are factors that are simply an embodiment of the cultural zeitgeist of the time and we can’t forget that it was elected representatives legislating their morality at the time that led to the formation of Jim Crow laws in the first place.

It would be sophomoric to argue that markets are perfect, but neither is government. The key distinction is that imperfection embodied in the government constitutes higher order injustices due to the ability of the government to force people in behaving a certain way. A private business cannot do that, most definitely not at the scale states can. If the Christian bakery incident occurred in another context, such as a black florist being forced to provide their services for a Ku Klux Klan event, there would be far more outrage at coercive legislation as opposed to the business at hand. Yet law needs to be applied symmetrically across all situations, there can’t be exceptions based on emotions. If it would be inappropriate for the law to be applied universally, then that itself is evidence the law should not exist in the first place. Freedom of association should be a fundamental right for every citizen.

Discrimination not endorsed by the state can be fought against at the individual level through a citizen making their opinion known with their dollar. We should most definitely condemn individuals that choose to practice such discriminatory practices within their businesses, but at the same time be aware of the dangers with letting the government assert authority. The other body of opposing opinion points to this idea that businesses implicitly agree to serve the society in which they operate in when they open up. Some cite the fact that public funds are used to support the infrastructure upon which some businesses succeed, so they must serve everyone in the public. While seemingly true at face value, consider the implications such a line of reasoning would have. Do people have a right to stay inside your house because they pay taxes which are used to ensure your property rights? Of course not. Fundamentally, we pay taxes to protect and improve our society. With that comes protecting certain rights that we agree are important, not only to gain access to infrastructure. In the previous example, the right in question was property rights, with businesses it is the right of association derived from the first amendment. What would our society be without such rights?

While such freedoms would permit behavior most would consider reprehensible, it is a foundational aspect of our society. There are a host of problems with having the government legislate and enforce their version of morality, and the free market provides real economic incentive for private businesses to not engage in bigoted practices. The concerns of the opposing viewpoint are valid, but ignore the consequences of state action when the state does not agree with the ethics they hold. We need only look back two generations to see the immense potential for harm.