Free Enterprise - The FindLaw Small Business Law Blog

Can Your Business Ban Racist Customers?

Last week, Khalil Cavil, a 20-year-old server for Saltgrass Steak House in Odessa, Texas, posted a photo of a receipt on Facebook that read "We don't Tip Terrorist" with no tip included and his name circled at the top. Cavil opined, "All day I've had to remind myself that Jesus died for these people too. I have decided to let this encourage me, and fuel me to change the world the only way I know how." And Saltgrass Steak House banned the customer involved.

Only it turns out that Cavil fabricated the racist message, and the customer has since been welcomed back. "Racism of any form is intolerable, and we will always act swiftly should it occur in any of our establishments," Saltgrass COO Terry Turney said in a statement. "Falsely accusing someone of racism is equaling disturbing." Still, the question remains: Can businesses legally ban racist customers?

Reserving the Right to Refuse Racists

If you don't already have one posted in your small business, you've probably seen the signs in someone else's shop: "We reserve the right to refuse service." But is that even legal? The answer depends on why you're refusing service. Generally, dress codes and shirt and shoe requirements are enforceable, even if there are no federal or state laws requiring patrons wear footwear. And, of course, non-paying, employee-harassing, or disturbance-causing customers can be banned for bad behavior.

But prohibiting paying customers from your business based on their beliefs can put you on trickier ground. Federal law makes it illegal to refuse service based on race, color, religion, sex, age, handicap, or national origin, and many states have extended those protections to homosexual and transgender customers. So public accommodations have a hard time banning customers for who they are -- can they ban them for what they think?

Banning Behavior, Not Beliefs

Banning customers, even racists, Nazis, or the KKK, for their beliefs can put you on shaky ground, legally speaking. The First Amendment provides protections for speech, association, and assembly in places that are open to the public.

So instead of banning large groups based on political beliefs, creating facially neutral policies regarding customer clothing, speech, or behavior can provide the basis for legally asking a disruptive customer to leave. Businesses can impose restrictions on customer conduct so long as those restrictions do not directly target protected classes, and dress code restrictions prohibiting customers from wearing swastikas or other clothing emblazoned with hate speech or obscenity could do the trick.

Still, writing and enforcing such policies can get tricky. Consult an experienced commercial attorney for assistance.

Related Resources: