Friday, August 30, 2019

Fair and Square: California Supreme Court Recognizes Unruh Act Standing in Case Against Online Purveyor

California’s Unruh Civil Rights Act (“Unruh Act”) protect each person’s right to full and equal access to all California business establishments.  Cal. Civ. Code §§ 51(b)., 52. But the extent to which it applies to online forums presents an interesting question.

Earlier this month, the California Supreme Court weighed in with an important decision in White v. Square, Inc. The Court was asked by the Ninth Circuit Court of Appeals, the court hearing the case, whether a plaintiff may bring a claim under the Unruh Act when the plaintiff leaves a website after encountering discriminatory terms and conditions, without entering into any agreement with the service provider. According to the Court, the answer is yes.

The case involves bankruptcy attorney Robert White’s allegations against Square, a company that provides a service to allow individuals or businesses to receive and accept electronic payments. Mr. White wished to use this service for his bankruptcy practice. He visited the website multiple times, reviewed the documents filed in a previous lawsuit against Square and a bankruptcy law firm, and carefully reviewed the terms and conditions. However, when he visited the web page to register for services, he did not proceed because Square's terms and conditions prohibited the use of its services for certain businesses, including the practice of bankruptcy law. Based on his research, Mr. White believed he could not sign the agreement without committing fraud.

He then filed suit under the Unruh Act, but his case was dismissed. The trial court ruled that White could not proceed with his case because he lacked standing. Standing is a legal doctrine that covers who may bring a particular lawsuit. Generally, people can only bring lawsuits under the Unruh Act in which they themselves “ha[ve] been the victim of the defendant’s discriminatory act.” Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, 175. The California Supreme Court disagreed with the trial court, holding that Mr. White had sufficiently shown that he was injured by Square’s discriminatory terms and conditions.

The California Supreme Court had previously addressed standing under the Unruh Act with respect to physical stores, but the Court had not yet issued an opinion addressing online forums. In Koire v. Metro Car Wash (1985) 40 Cal. 3d 24, a male plaintiff sued several car washes that observed “Ladies’ Day,” on which female patrons were offered discount prices. The California Supreme Court held that the plaintiff established standing because his requests for the same discount price was turned down. In Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, a group of men sued a nightclub they frequented where they had been paying more than female patrons. The Court held that the men had standing to proceed under the Unruh Act because they had paid the unfair prices, even though they had not asked to pay the same rate as the female patrons. These brick-and-mortar cases demonstrated the broad reach of standing under the Unruh Act, the Court opined.

The California Supreme Court further likened Square’s website to a physical storefront with a sign that reads, “We sell on credit. (Black people must pay cash.)” According to the Court, a person who declines to enter the store has suffered the type of discrimination envisioned by the Unruh Act and has standing to sue under it. No different if the discriminatory posting were online. In another analogy, the Court compared Mr. White’s experience to that of “an individual who intends to take a drink at a shopping mall and leaves upon encountering unattended segregated drinking fountains.” The result remained the same with Square’s website, in the Court’s view of the Unruh Act.

The Court rejected Square’s arguments to the contrary. Square argued that Mr. White did not sign up for the service, so he was never actually subject to the discriminatory terms and conditions. But the Unruh Act protects against discriminatory terms that deter people from engaging a service to begin with, the Court countered. Similarly, the Court rejected the notion that Mr. White would have needed to show that Square had applied its allegedly discriminatory policy on a particular occasion to prevent Mr. White from patronizing the service in the first place. Square also raised the scepter of overlitigation should plaintiffs like White be allowed to proceed under the Unruh Act, but the Court rejected this argument as well, reasoning that such a consideration was for the legislature, not the courts.

The Court also rejected the reasoning of the Court of Appeals in Surrey v. TrueBeginnings, LLC (2008) 168 Cal. App. 4th 414. The plaintiff in Surrey had sought to patronize an online dating site but decided not to after he discovered that men were charged higher rates than women. The Court of Appeals held that the prospective patron lacked standing because he neither attempted to nor actually patronized the services. The White court expressly held the opposite.

If you have faced discrimination by a business or website, contact Bryan Schwartz Law today.

Tuesday, August 6, 2019

Fair is Hair: California Makes It Illegal to Discriminate on the Basis of Hair Styles

Last month, Governor Newsom signed a landmark anti-discrimination bill into law. This law takes aim at grooming policies that discriminate on the basis of race through restrictions against types of hairstyles.

Under the California Fair Employment and Housing Act (“FEHA”), employers cannot engage in certain employment actions, such as hiring, firing, promoting, or disciplining, on the basis of protected characteristics, including race. One might think that this prohibits discrimination based on hair styles that are historically associated with race. Not necessarily. FEHA does not say so explicitly, California courts have not considered the issue, and some federal courts have held the opposite. SB 188, which goes into effect at the start of 2020, seeks to clarify that race discrimination includes hair-based discrimination.

In enacting SB 188, the California Legislature was concerned by the story of New Jersey high school wrestler Andrew Johnson, who was forced to choose either to cut his dreadlocks or forfeit a match. The Legislature also took note of Rafael Scott and Sheldon Lyke, two African-American men who were turned away from a Chicago nightclub because of their braided hair styles. Even outside the employment context, the Legislature noted in the findings section of SB 188, “hair remains a rampant source of racial discrimination with serious economic and health consequences, especially for Black individuals.”

However, leading federal court decisions have held that hair-based discrimination does not implicate the federal Title VII to the Civil Rights Act of 1964. Federal courts have generally held that federal civil rights applies only to “immutable” characteristics—characteristics a person is born with and cannot control. A New York federal court relied on this notion to rule that an American Airlines grooming policy prohibiting braided hairstyles did not discriminate on the basis of race. Rogers v. Am. Airlines, Inc., 527 F. Supp. 229, 232 (S.D. N.Y. 1981). In the court’s view, the policy did not discriminate on the basis of race because American Airlines employees could choose whether or not to braid their hair.

The 11th Circuit Court of Appeals reached a similar conclusion in EEOC v. Catastrophe Management Solutions, 852 F.3d 1018 (11th Cir. 2011) (“Catastrophe”). In that case, an employer rescinded an employment offer when it learned the prospective employee styled her hair in dreadlocks. According to the employer, the dreadlocks violated the company’s grooming policy, which required employees “to be dressed and groomed in a manner that projects a professional and businesslike image while adhering to company and industry standards.” Again relying on the idea that hair styles are not immutable traits, the 11th Circuit determined that the employer’s grooming policy was not discriminatory.

Some federal decisions have come out the other way. In Jenkins v. Blue Cross Mutual Hospital Insurance, Inc., 538 F.2d 164 (7th Cir. 1976) (“Jenkins”), an employee alleged that she was subject to racial discrimination because she wore an afro. The 7th Circuit Court of Appeals ruled that this allegation sufficiently expressed an actionable discrimination claim. But the Eleventh Circuit distinguished this case, reading it to hold that African-American hair texture is an immutable characteristic while African-American hair styles are not; the employee in Jenkins wore a “natural afro,” while the employee in Catastrophe chose to wear braids.  

The California Legislature passed SB 188 out of concern that state courts looking to the federal courts for guidance would agree with the Catastrophe court. To ensure there would be no confusion, the Legislature included in the section of findings and declarations, “The courts do not understand that afros are not the only natural presentation of Black hair. Black hair can also be naturally presented in braids, twists, and locks.”

In practical terms, SB 188 adds two subsections to FEHA clarifying that “Race” includes traits historically associated with race, including hair texture and protective hairstyles. The law also adds two new subjections to Section 212.1 of the Education Code to the same effect.

Two weeks after California passed SB 188, New York followed suit with a similar law. Perhaps other states will follow.

If you are facing racial discrimination in the workplace based on your hair style, contact Bryan Schwartz Law today.