According to Attorney Craig Fagan, a business cannot refuse service to anyone that the Civil Rights Act deems a "protected class." This would include discrimination based on race, color, religion, sex, creed, national origin or disability. Fagan asserts that, although many businesses hang signs stating, "We reserve the right to refuse service to anybody," these signs are illegal and provide a way for a business to excuse illegal discrimination against certain consumers.
Fagan asserts that, because direct evidence or obvious discrimination such as, "I'm sorry, but our company does not do business with Blacks" rarely becomes available, courts will consider "indirect evidence" of discrimination. For example, an African-American woman enters a pub and requests an application for a waitress position and is told by management that there are no positions available. Moments later, a white woman enters and requests and completes an application. If reported, a law firm or EEOC investigator could send in undercover "testers" to determine if in fact the pub practices overt discrimination. As reiterated by Fagan, "The law considers indirect evidence as powerful as direct evidence ...either [can] prove a case of racial discrimination at trial."
By definition, marketing and marketing research relies on segmenting the population into certain demographics such as age, gender and ethnicity. Research companies regard this type of discrimination as acceptable in that these classifications actually benefit stereotyped groups. However, such tactics as price discrimination and promotional strategies used to lure certain demographic groups to specific businesses are coming under fire. Examples of this could be restaurants discounting prices for children and retirees and clubs discounting cover charges and drinks for "Ladies' Nights." Recently, several state court opinions cite Ladies' Nights as gender-based discrimination and therefore unconstitutional. Currently no one has instigated litigation regarding age-based price discrimination.
According to the article, "A History of Redlining," the term "redlining" originates from realtors and lending groups dividing community maps into "types" noted as either A, B, C or D. The black and low income neighborhoods, characterized as Type "D," were outlined in red on the map, indicating those areas as less than desirable for lending consideration. Although historically associated with financial institutions, the supermarket industry has also been seen to be incorporating this policy into its marketing strategy. According to Food First, an Institute for Food and Development Policy, "The supermarket industry has drawn boundaries defining where fresh, nutritious, competitively priced food is and is not provided for communities throughout the country. The result of supermarket redlining is that low-income shoppers are cut off from easy access to nutritious, affordable food." The Community Reinvestment Act, a federal statute, addresses lending practices, but does not deal with nonfinancial practices or mention "redlining" in particular.
H.R. 3126: Consumer Financial Protection Agency Act of 2009
In 2009 a federal statute was introduced "To establish the Consumer Financial Protection Agency, and for other purposes." Although H.R.3126 is currently on the House calendar, no vote is scheduled.
- The Law Offices of Craig P. Fagan: Racial Discrimination by a Store or Business
- EEOC Overview: The Economics of Discrimination
- Federal Trade Commission: Mortgage Discrimination-A Guide to Understanding Your Rights & Taking Action
- John Little-University of Miami: A History of Redlining
- Food First: Redlining Food-How to Ensure Community Food Security
- FindLaw: The End of "Ladies' Night" in New Jersey
- Center for Consumer Equality: Assessing Consumer Racial Profiling and Marketplace Discrimination
- University of Texas at Austin: Consumer Discrimination in the Marketplace
- FFIEC: The Community Reinvestment Act
- GovTrack: H.R. 3126: Consumer Financial Protection Agency Act of 2009
- Justice image by MVit from Fotolia.com