Insureon Blog

Can You Legally Refuse to Serve Your Customers?

28. June 2017 14:38

woman behind a shop counter

By Elizabeth Weiss, Avvo

No shirts, no shoes, no service.

We reserve the right to refuse service.

It's a free country, and a business can turn away anyone they find undesirable, right? Wrong. If this were true, the owner of Masterpiece Cakeshop in Colorado would not have found himself on the receiving end of a discrimination lawsuit for refusing to sell a wedding cake to a same-sex couple, citing his personal religious beliefs as the reason behind his rejection.

Just because another person's lifestyle choice may offend you or go against your religious beliefs, it's not always ok to refuse to serve a customer.

Is It Ever Legal to Refuse Service?

The United States has local, state, and federal laws that address refusing service to customers. Chief among these is the Civil Rights Act of 1964.

"The federal Civil Rights Act covers all businesses which are places of public accommodation [restaurants and stores, mostly]. Under that law, you cannot discriminate on the basis of protected classes: race, gender, religion, etc.," says Matthew Kreitzer, an attorney with Booth & McCarthy in Winchester, Virginia. Americans with disabilities are also protected from refusal of service.

The combination of federal and state laws is one big reason Masterpiece Cakeshop ran into so much trouble. While some states have enacted Restoration of Religious Freedoms Acts, attempting to grant extra protections to business owners who refuse service on the basis of their religious beliefs, "These laws have come under strict scrutiny by the various courts of our nation," Kreitzer says.

There's No Such Thing as Bad Publicity?

While some people may take stock in the idea that there is no such thing as bad publicity, there are indeed some behaviors or actions that can tank your business in a heartbeat. Refuse a bridal couple from purchasing one of your wedding cakes in a largely liberal community and you're likely to feel the heat from colleagues, customers, and complete strangers.

"Generally speaking, it is probably never a good idea to refuse an individual service. It can quickly come around to be bad for business from a press perspective," says Kreitzer. Take the flurry of news that hit a Catholic hospital after a New Jersey transgender man filed a lawsuit, in which he alleged the hospital had illegally discriminated when it declined to perform a hysterectomy as part of his gender transition.

Or the case of Memories Pizza in northern Indiana, whose owners said they'd refuse to cater a gay wedding. Public reaction on both sides was swift: first a rash of condemnation, which forced the pizzeria to temporarily shut down; then a show of support, as backers pledged money to help the pizza place reopen. While Memories Pizza survived, few businesses would like to endure such a publicity storm.

When It's OK to "Just Say No" to a Customer

Perhaps you've never turned anyone away from your place of business. But you may have thought about it. Rest assured, you can get into a legal mess if you refuse service to the wrong person, but you are also within your rights as a business owner to call the shots.

"Many common reasons for denying a person service is if they are creating an unsafe or hostile environment," says Kreitzer. "Even if you have an innocuous reason for denying service, such as [the customer] being belligerent, drunk, etc., you may find yourself facing a lawsuit down the line."

So how do you protect your customers and your business from the bad seeds without ruining your reputation in the process? Rely on law enforcement to do the job of kicking a troublemaker to the curb. But keep good records, too.

"Many businesses have instituted 'incident reports.' Whenever something out of the ordinary happens in customer service, managers will have employees record it in a book," says Kreitzer.

While such habits can be helpful, Kreitzer does caution that businesses should consult a lawyer about best practices regarding customer discrimination in general and for their particular line of business.

Ultimately, you may not like someone's choice of footwear (or lack thereof), you may not approve of their vulgar tattoos, and you may not care for their lifestyle choices.

"Whenever any business denies service to anyone, it is possible that an individual will find an attorney somewhere to file a lawsuit," says Kreitzer. "Denying service should always be a last resort. Even if you have good intentions, it can come back to haunt you."

About the Author

Elizabeth Weiss is a freelance writer and web content developer. Her work has appeared in Forbes, Reader’s Digest, Playboy, Marie Claire, and other print and online publications. Elizabeth also writes about legal issues in everyday life on the Avvo Stories blog. Avvo (@Avvo) is a legal marketplace that offers quick, personalized, and flat-rate services. Visit avvo.com for any legal needs, such as to file for divorce online.

Tags:

Lawyers | Small Business | Small Business Risk Management | Tips for All Small Businesses

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