Colorblind Collaring

A Gap In The Law

The law prohibiting discrimination against retail customers is not as straightforward as one might assume. "There is actually a gaping hole in federal laws," Taber says. Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race in a wide range of places open to the public, doesn't apply to retail stores. "In the 1960s, retail stores were not considered sources of discrimination," Taber explains. A lunch counter in a store would be covered but not the store itself.

The federal law most commonly applied in these cases, USC Section 1981, was established after the Civil War to allow minority buyers to purchase property. The law states that all persons within the jurisdiction of the United States have the same rights to make and enforce contracts as white citizens. Courts have ruled that buying or returning merchandise is covered by this law, as it involves making or modifying a contract to buy. However, Section 1981 may not protect customers who are merely browsing.

Consider a recent Louisiana case. An African American woman had made some purchases at a department store and was waiting for some friends and family members to finish their purchases. A local deputy, suspecting the woman of shoplifting, accosted her. The woman shouted obscenities, and the deputy told her to leave. When the woman sued under Section 1981, the U.S. District Court for the Eastern District of Louisiana ruled that because she was no longer actually shopping, she wasn't covered by the law. The court, however, refused to dismiss another of her claims-a common-law claim of battery. The court ruled that it was up to the jury to decide whether the deputy twisted her arm and hit her on the neck.

As the previous example displays, many of these cases aren't technically about discrimination. Some states-including Massachusetts, where the state pursued The Children's Place-have state laws against retail discrimination. But in states that don't, the plaintiffs' attorneys must bridge the gap in the federal law by alleging battery, false imprisonment or other common-law claims. In the Eddie Bauer case, the jury found negligent supervision, false arrest and defamation.

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This article was originally published in the May 2001 print edition of Entrepreneur with the headline: Colorblind Collaring.

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