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How discrimination fits into the business model

Gigi Douban Apr 1, 2015
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How discrimination fits into the business model

Gigi Douban Apr 1, 2015
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Those signs on business windows that say “we reserve the right to refuse service to anyone”? They’re legal.

Indiana’s law allowing businesses to refuse service for religious reasons is bringing more attention to a separate but related issue: recognizing gender and sexual identity as a protected class, as more than 20 states already do. The Indiana Chamber of Commerce says some members have already suffered business losses.

The reality is this: businesses discriminate against people all the time. Think of someone getting rowdy at a bar who gets booted out. A business owner can do that, says Kirk Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University.

“They can take somebody who comes in smelling and someone who’s going to cause difficulty because of some characteristic,” Hanson says.

That characteristic can’t be race. Federal law prohibits that kind of discrimination at public accommodation places like grocery and hardware stores. As a class, minorities are protected. And Hanson says what’s been happening in Indiana might lead to LGBT people being covered as a protected class.

“This fight may well be the rising crescendo to getting sexual orientation covered in the federal law,” Hanson says.

For that to happen, Congress would have to act. For now, even under Indiana’s extremely controversial law, a business refusing to serve gays and lesbians might not be able to justify its actions.

“You know, it’s going to be a lot easier, I think, to make the case under Religious Freedom law that your faith does not permit you to participate in a same-sex wedding than to make the case your faith doesn’t permit you to serve gay customers at all,” says Ramesh Ponnuru, a fellow with the American Enterprise Institute.

Legally, he says, those are very different situations. Nevertheless, excluding customers is baffling to Elliot Richardson, CEO of the Small Business Advocacy Council in Chicago.

“Most of the time you’re going to sell to everybody, as long as they can pay for it,” Richardson says.

And as some Indiana businesses have already learned, customers make choices as to where they do business, too.

 

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