Tortes and Torts

08/14/2018

Prior to starting my own business, I worked for four different companies, at which I reported to a total of six different executives. Each was a mentor to me in one way or another.

One of them, who was by far the most difficult to work for, was perhaps the most assiduous student of business in general. He instilled in me some principles that have served me well over the years, but he also did some strange things.

Once, for example, he told me that he didn’t wish to do any further business with one of our major customers, for no apparent reason. I asked him on what grounds were we to refuse their next order, and he answered that he didn’t need any grounds. “You can refuse to do business with someone simply because you don’t like them,” he said, “or for no reason at all.”

Was he right about that? Well, yes and no.

On June 4th, the United States Supreme Court finally decided the case of Masterpiece Cakeshop v. Colorado Civil Rights Commission. As you probably recall, the case involved a bakery owner named Jack Phillips who refused to make a wedding cake for a same-sex couple, Charlie Craig and David Mullins.

Phillips told the couple that they were welcome to buy other products off the shelf, but his Christian faith did not allow him to create a cake specifically for a gay wedding. Craig and Mullins filed a complaint with the state of Colorado, in spite of the fact that same-sex marriage was not lawful in the state in 2012.

The state civil rights commission ruled that Phillips had violated Colorado’s anti-discrimination statute, and that he must pay a fine. He then took the commission to court, resulting in a six-year legal battle that finally landed on the Supreme Court docket.

In a 7 to 2 decision, the high court ruled that Colorado’s statute was trumped by Mr. Phillips’ constitutional right to exercise his religion as he saw fit. The call was probably made easier by a review of the Colorado Civil Rights Commission’s deliberations, in which there were numerous expressions of hostility toward Christian teachings on marriage, and denigration of the baker’s beliefs and motivation.

The court made clear in the written opinion that the government has no business making judgments about anyone’s religion, and there is no stricture that prevents a business owner from bringing his personal beliefs with him to the office. There were other places where the court was very careful not to go.

It did not settle a second objection that Jack Phillips had raised in the case, that the civil rights commission was trying to violate his right of free artistic expression. It also failed to address the broad issue of whom a business could refuse to serve and on what grounds.

Most of what we know about that question goes back to the Civil Rights Act of 1964, which prohibits discrimination in schools, housing, employment and places of public accommodation based on certain criteria. Those are race, religion, color, creed, nation of origin, citizenship, sex, age, disability, or veteran status.

Since then, a number of states have passed statutes of their own to supplement the national law. Conditions they try to protect from discrimination include marital status, sexual orientation, gender identity, illness, and political affiliation.

My old boss was correct in a narrow sense. You may decline to do business with someone for no reason, but if you have a reason it cannot be one of those that is prohibited by either the federal government or your own state. Theoretically, you could refuse service to someone simply because you don’t like him.

Keep in mind, however, that if everyone you “don’t like” has something in common, and it happens to be one of the traits listed in the statutes, it can be construed that you have an ulterior motive for your actions. That would also apply if your “no reasons” seem to follow a pattern, and you could be subject to fines and other penalties.

One way to avoid the appearance of a bad reason is to have a good reason, and every retailer should have a clear sense of what that might be. In general, the most compelling reason is that a person or group of people presents a threat to the health, safety, or sense of well being of the other patrons.

Specific examples could cover a lot of ground, but I’ll just name a few. You might consider that a customer was a potential health threat if he had poor hygiene, was smelly or dirty or bloody or whatever. You might think that a large group was a safety threat because of over-crowding. You might decide that someone who was loud or argumentative might make your customers uncomfortable.

The fact that you perceive a threat, by the way, is sufficient reason to ask someone to leave. A California court affirmed that principle in 2001, when it sided with a sports bar which ejected a motorcycle club simply because such clubs sometimes start fights.

If you’ve ever spent a vacation at the beach, you have surely seen the famous “no shirt, no shoes, no service” sign, which can no doubt be defended on the basis of health concerns, among others. I have always wondered more about restaurants that have dress codes such as men having to wear neckties, or nightclubs that select patrons according to looks or gender.

I play golf on public courses, and most of the public courses around here are very casual operations with working-class clienteles, pickup trucks in the parking lots and empty beer cans on the tee boxes. I’m very comfortable in such places.

There is one public course in my area that is much more toney. It was designed by a famous golf architect, has a beautiful clubhouse with a spectacular view, and charges more than twice as much as most clubs. I play there maybe once a year.

They have a lot of rules, for things like how many inches your shorts may be above your knee. A few years ago a friend of mine was told that his designer golf shirt was unacceptable because it didn’t have a collar. The pro shop was happy to sell him a shirt, with the club name on it, for $75.

With conventional retailers under intense pressure from the internet, and golf participation in decline as well, there is a certain irony involved in this whole matter of exclusivity. Amazon doesn’t care how long your shorts are, or whether or not you are wearing them.

I have long held that the ultimate savior of brick and mortar was going to be human nature. Up to this point, the history of commerce has been driven by efficiency, continuously providing goods and services better, faster and cheaper.

If that process were to continue unabated, eventually stores would disappear in a world where we just think of a product and it appears. (Then products would start appearing before we think of them.)

I think people will shop in stores for the simple reason that they want to be around other people. The challenge for you is not to figure out whom you don’t want in your store but whom you do, and communicate to them that there is a place for them to get together.


You can e-mail Kevin at kfahy@fwpi.com.

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