Refusal of Service: When Does Owner Discretion Become Discrimination?

One of your primary goals as a business owner is likely to drive more clients and customers to purchase your goods or services. In most cases, business owners adopt a "the more, the merrier" approach. For good or ill, however, there are some important exceptions to this general rule. And when push comes to shove, there are instances in which businesses may prefer to decline to render service to a given customer. When that situation does arise, you need to be sure that your decision does not run afoul of the law.

Businesses might decline to sell a product or provide a service for any number of legitimate, understandable, wholly legal reasons. Most of the time, this is because the client's request lies beyond a business' ability to fulfill it. This could be due to staffing issues, limited skill set, inventory problems, or a host of other reasons that make it impossible for a business to make a product or service available in a way that meets the customer's expectations or needs.

Where some businesses have run into a problem is when they refuse service for reasons that put them at odds with federal, state, or municipal anti-discrimination statutes. Most businesses are considered areas of public accommodation. As such, they must comply with the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, or national origin. Several states have enacted legislation that expands protected classes to sexual orientation. Additionally, the Americans With Disabilities Act prohibits discrimination against the disabled.

Two broad areas of possible exception include the business owner's religious beliefs and the business owner's right to freedom of speech as exercised in artistic self-expression. Some recent, high-profile cases have lodged one or both as defense strategies for decisions to decline service to a member of a protected group. In some cases, the strategy was successful (i.e., a t-shirt shop owner was not prosecuted for refusing to print shirts for a gay rights festival based on his religious beliefs). In other instances, it was not (i.e., a florist who refused to supply flowers for a gay wedding was heavily fined).

Business owners would be wise to take great care in their decision-making centered on this issue. In the United States, the matter is far from cut-and-dried, and inadvertent missteps can be extremely costly, both literally and metaphorically.