When is refusing service legal and when is it discrimination? (2023)

Many retail businesses in Arizona have a small paper sign hanging on the wall, usually near the cash register that says something like “We reserve the right to refuse service to anyone.”

The trouble is, that’s not necessarily true.

During the fury over SB 1062 two weeks ago, news accounts, press releases and especially social media were full of assertions that in America, a business owner doesn’t have to do business with anyone he or she doesn’t want to.

Defenders of SB 1062, most notably the Alliance Defending Freedom, a Christian legal defense organization, described hypothetical scenarios in which two groups historically at odds or in conflict might be forced to do business with each other if SB 1062 wasn’t passed.

For example, in an editorial sent to state media outlets, the alliance wrote, “Do you believe a photographer who identifies as homosexual should be punished for refusing to photograph an event celebrating the Westboro Baptist Church’s hateful ideas?”

The alliance asserts that without SB 1062, the photographer would be required to shoot the celebration.

Perhaps not. Depending on the state the photographer was in and the reasons the photographer refused to photograph it, the denial of service may be perfectly legal and not a violation of members of Westboro Church’s rights.

At issue in SB 1062 and in other states considering similar laws are the little understood laws governing public accommodation, which allow for people who believe a denial of service was discriminatory to sue the business for violating their civil rights.

The fact is, according to civil rights and business law experts, when business owners hang up open signs, whether literally or figuratively, they have a responsibility to treat all customers equally under the law.

State and federal civil rights laws prohibit employment discrimination and discrimination in places of public accommodation for reasons of race, color, national origin/ancestry, sex/gender, religion/creed and disability (physical and mental).

Some of the outrage over SB 1062 was that it allowed for protection from government enforcement of civil rights laws if the violation of the law was found to have been based on a “sincerely held religious belief.” SB 1062 opponents argued that would have given religious business owners the right to discriminate against gays and lesbians and possibly others.

But Eunice Rho, advocacy and policy counsel for the ACLU’s national office in Washington D.C., says business owners already can refuse to do business with gays and lesbians in Arizona, except in Phoenix, Tucson and Flagstaff, which are charter cities that have enacted city ordinances adding gays and lesbians to the protected class.

But, she said, when it comes to signs asserting the right to refuse service, those signs are meaningless.

“I want to make it clear that those kinds of signs are a bit of a fiction. You do not have the right to refuse service to anybody…there are protected classes. There are state laws, federal laws and in Arizona’s case, local laws that provide protection against discrimination. So that business owner does not have an overriding right to trump those laws,” Rho said.

Cassandra Meynard, a Tucson litigation attorney with Mesch Clark and Rothschild, said business owners can refuse to serve customers, but must be careful that the denial of service is based on customer behavior, decorum or the health and safety of patrons and employees.

“Normally, (refusal of service) would only be warranted where the customer’s presence would somehow be distracting to the wellbeing, to the safety, to the welfare of the other people in the business and the business itself. They can’t arbitrarily refuse service to some because they don’t like the way that they look,” Meynard said.

A few Tucson business owners contacted about how they handle refusing service to customers said the parade of horribles brought up by both SB 1062 opponents and proponents rarely, if ever happen.

Ali Bagheri, owner of World Wide Wrappers, a wraps and juice bar on Fourth Avenue, said in 15 years of business, said he’s rarely had to ask someone to leave and it was usually because they were “really drunk or unhygienic or had an attitude.”

Tom Alfonso, owner of Alfonso Gourmet Olive Oil & Balsamics, in the Foothills and Oro Valley, said conflicts sometimes occur for personality reasons between customers and employees, but in those instances, he has another employee serve the customer.

He said he’s never had an instance where he had to refuse service, though he has had customers walk out for unknown reasons, including one customer who walked out because he was serving a customer who was transgender.

“So it works both ways, customers can refuse” to do business with him, too, he said.

Complaints about discrimination can be complicated. Depending on the allegation, they can be filed with the city, the state or the any of several dozen federal agencies, and each level of government has different rules about when and how to file.

Tucson Attorney Mike Rankin said Tucson added sexual orientation as a class to its antidiscrimination law in 2007. He said violations of the law are a civil offense and carry a $300 fine. However, he said no one has ever filed a complaint since the law was enacted.

Training for businesses about rules of public accommodation and when refusal of service is or isn’t appropriate is sparse. No information about public accommodation training could be found on any of the Tucson area chamber’s websites, SCORE, statewide tourist and lodging associations or hospitality industry associations.

Neither Rho nor Meynard said they were aware of any such training.

Jerry Bustamante, Arizona Small Business Association vice president for public policy and Southern Arizona, said training on public accommodation rules was a good idea and he would suggest it to his organization’s board.

Bustamante said ASBA opposed SB 1062 for many of the same reasons all the other state and local business organizations did, but also because of the law of unintended consequences.

“ASBA concluded that 1062 would have unintentionally exposed private sector businesses and its owners to liability by allowing an employee to exercise their own religious beliefs at the expense of the business. SB 1062 would have shifted the balance of control from the business owner to employees, who could decide to refuse someone’s business based on their own personal religious beliefs and not that of a business owner. As a result, the business and its owner(s) would be held liable for an employee’s actions while exercising their religious convictions,” Bustamante said.

Rho and Meynard agreed that was a likely consequence of the bill if it had been signed.

“The way this law was written would have allowed employees to defy their employers. Even if you had a restaurant in (Tucson) you may want to not discriminate against your customers but your employee could now have a right to do so,” Rho said.

Even so, Meynard said despite the bill being vetoed, business owners still have to be careful when it comes to the religious beliefs of their employees. Just as business owners can’t discriminate against patrons for reasons of religion, they can’t discriminate against employees for religious reasons either.

But that doesn’t mean an employee gets to dictate the terms of employment, Meynard said. While business owners have to make a reasonable accommodation when an employee asserts a religious belief that conflicts with a duty of employment, employers can’t be compelled to unreasonably alter their business.

Staff Writer Hillary Davis contributed to this story