Entrepreneursí Rights and Discrimination

The passage of Indiana’s Religious Freedom Act has raised questions about the right of business owners to practice their religion and their obligation not to discriminate against any customer.

“Religion is not about balance. It is about tension - not tension with the outside world but rather internal tension that at some time needs to be addressed and resolved,” according to Reverend Dr. Gordon Myers, Pastor at Rockport United Methodist Church in Rocky River. “For me, the attempt of the Indiana law is to bring that tension into the mix and allow individuals to struggle with the implications of their societal, ethical, moral, and religious compass.”

The Indiana Religious Freedom Restoration Act provides that a state or local government action may not substantially burden a person's right to the exercise of religion. The key here is the definition of substantial burden.

Not surprising was the criticism of the new law from some politicians in other states. Maybe more surprising was the criticism from business leaders, including Tim Cook of Apple, Marc Benioff of Salesforce, and Bill Oesterle CEO of Angie’s List. Some were even calling for moving the Final Four basketball tournament from Indianapolis.

So what is the responsibility of business owners when it comes to balancing these two seemingly contradictory issues? Are entrepreneurs allowed to refuse service to those customers whose lifestyles conflict with their beliefs?

Bill Ferry, attorney and owner of Ferry Legal LLC in Westlake, stated, “I advise all of my clients that the best way to avoid legal issues is to do good quality work with a good spirit, and give consideration to the customer.  I think this is a ‘golden rule’ way to do business. It may force some businesspersons to swallow their pride, serve the customer - always the king or queen, and be thankful for the prosperous and peaceful country we live in.” 

As part of the controversy, an Indiana woman whose family owns a small-town pizzeria said in a local TV interview that she would not cater a same sex wedding. Crystal O'Connor of Memories Pizza noted that her family would serve a gay couple or a non-Christian couple at its restaurant in Walkerton, Indiana, but would not participate in a gay wedding due to religious beliefs.

“I believe it was unfortunate for the pizza shop owner to be placed in a philosophically and societal unwinnable position.  The pizza shop owner answered in a way that addressed the societal and religious issues from a practical and healthy perspective,” according to Myers. 

O’Connor and her family were threatened after she made these remarks and the business was closed. This led to an online crowd-funding campaign that raised over $800,000 for the business from those who either supported the law or opposed the threats levied against the pizza business. Memories Pizza has since reopened.

 “For a pizza shop, to do business at all is to do business with the protection of the laws.  If a person wishes to do business in the U.S. with the protection of the laws, then it needs to serve everybody,” Ferry said.

The latest group of Religious Freedom Reformation Act (RFRA) laws that have been passed in 20 U.S. states claim to protect First Amendment religious rights. Opponents of the laws, however, contend that they are used to discriminate against customers. Critics say these laws are preemptive. They attempt to keep religious business owners from having to serve same sex couples.

Some legal experts warn the RFRA bills tend to expand the narrow cases where individuals and businesses can use religion to opt out of activities the state might compel them to do, such as to serve all customers. These laws can also allow religious excuses to free people from certain legal claims, such as might arise in jurisdictions with broad protections against discrimination, including people who are lesbian, gay, bisexual or transgender.

Ferry concluded that business and religion have always been mixed everywhere, always.  “For many people, religion is a source of moral and ethical information, much of which is compatible with business success.” 

Perry Haan

Dr. Perry Haan is Professor of Marketing and Entrepreneurship and former Dean of the Business School at Tiffin University. He resides in Rocky River and can be reached at 419-618-2867 or haanpc@tiffin.edu.

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Volume 2, Issue 10, Posted 3:40 PM, 05.09.2015