Why Employers Should Think Twice Before Acting On Their Customers’ Discriminatory Preferences
This piece originally appeared on LeClair Ryan’s EPLI Risk Blog and is republished here with permission.
Imagine this scenario: You’ve worked hard to build a profitable business and you’ve done it the right way. You’ve taken every step to control the things you can control about every aspect of your company. You’ve got handbook policies regarding equal employment opportunity and prohibiting discrimination or harassment on any basis and you have a diverse workforce that evidences your commitment to equal opportunity.
Now imagine that, one day, a customer comes in with money to burn and one small caveat: he doesn’t want to deal with anyone but white males. Of course, you wouldn’t treat anyone in your workforce differently because of their race, sex or religion, but directing that only specific employees deal with particular customers isn’t treating anyone differently, right? Plus, in any case, your customer is doing the discriminating, not you, right?
Wrong. This is the exact situation a Virginia branch of a large hardware supply chain recently faced when one of their customers asked that the hardware store send a white employee to deliver their goods.
When the hardware store got the request that only white employees make the delivery, the customer’s goods were already en route, and a black employee was driving the delivery truck. Faced with the choice of upsetting the customer or acting as a conduit for the customer’s discrimination, the hardware store’s now former manager, unfortunately, chose the latter option; the manager called the black delivery driver, told him to return to the store because the customer didn’t want a black driver delivering their goods and replaced the black driver with a white driver.
Title VII of the Civil Rights Act of 1964—the primary federal law addressing employment discrimination on the basis of race, color, religion, national origin and sex—makes clear that an employer’s wish to cater to the actual or imagined discriminatory whims and preferences of its customers is generally not a valid defense for treating employees differently based on their protected characteristics. The U.S. Court of Appeals for the Seventh Circuit summed up the law in this area quite well stating:
“[i]t is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.”
–Chaney v. Plainfield Healthcare Ctr., 612 F.3d 908, 913 (7th Cir. 2010)
(Note: that the same might not hold true for a customer preference based on gender, religion or national origin because employers can claim a bona fide occupational qualification in limited circumstances where the employer may be unable to perform the primary function or service it offers or where the customer preference is related to abilities to perform the job).
Simply put, if your customer makes a request that will require you to alter the terms and conditions of employment of your employees solely on the basis of their protected characteristics, in all but a few rare instances, acquiescing to that request likely constitutes a violation of Title VII (and let’s not forget that courts around the country have begun to interpret Title VII’s prohibition on discrimination on the basis of sex/gender as extending protection to individuals who identify as LGBTQ). In this day and age, even briefly entertaining a customer’s discriminatory request can potentially turn an employer with a long track record of fairness and equality into the focus of a reputation-destroying viral news story. Accordingly, it’s important for employers to educate their executives, managers and other staff on their rights, duties and responsibilities under the law, as well as on relevant company policies.
If you’re ever faced with a situation where you think a customer preference might be discriminatory, in the immortal words of Andre 3000, “reconsider, and read some liter-ature on the subject” (preferably this blog post) before you cave to that request.
Posi Oshinowo is an attorney in LeClairRyan’s litigation department, where he focuses primarily on the defense of employers in claims alleging breach of contract and wrongful termination as well as claims of age, race, gender and disability discrimination in state and federal courts. Oshinowo, who is based in the national law firm’s Richmond office, also advises employers, families, professionals, athletes and entertainers regarding U.S. immigration matters as well as French and Canadian employment-based immigration matters. He can be contacted at 
