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You may want to attract a particular group of people to your business, so you may devise ways to get their attention and use your company. You might offer discounts or specials to that group. The flip side of discounts for one group is denying them to others, which may violate federal, state, or local anti-discrimination laws.
A family-run San Francisco Bay Area restaurant shut down in January because it couldn’t afford to continue after settling a “Ladies’ Night” discrimination lawsuit, reports the Mercury News. Concord, California’s Lima Restaurant was the defendant. Chef and owner John Marquez told a local TV station it couldn’t bounce back after resolving a lawsuit about a promotion involving discounted drinks for women brought by men.
Laws Prohibit Discrimination Against Everyone
These lawsuits are often based on anti-discrimination public accommodation laws that ban discrimination based on a person’s sex and other bases like age, race, color, national origin, or sexual preference. These laws are worded neutrally, so they apply to people of all ages, races, colors, sexes, etc. Under the law, offering discounts only to women would be just as illegal as offering them just to men or Caucasians.
Many owners of small businesses may be eager to attract new customers and are unaware of the full implications of these laws. They may think laws are to protect women, so offering only them lower prices must be OK. But these laws apply to everyone. You add these broad laws to a population of people more open to filing lawsuits plus attorneys willing to take them, and you have a rising tide of legal actions putting small businesses with slim margins under.
These cases usually settle, and defendants may not have the resources to hire attorneys. They may agree to generous settlements without fully knowing their rights or the weaknesses of these cases. They may want these lawsuits to end and be overly optimistic about their long-term ability to pay them.
More Americans Willing To Sue, More Attorneys Willing To Take Cases
Plaintiffs’ lawyers may see these cases as relatively quick and easy ways to generate income. San Diego attorney Alfred Rava represents hundreds of clients in lawsuits across California against women’s organizations and women-only events, including a minor league baseball team’s promotion to women, female-led startups, and businesses offering Mother’s Day freebies.
America is becoming more litigious, and more lawyers are looking for work. Technology makes creating the necessary forms and paperwork for legal actions easier and faster, and lawsuits and judgments against small businesses are up.
Insurance With Enough Of The Right Coverage Can Help
Many small businesses lack the resources to combat reverse-discrimination public accommodation lawsuits. They may have liability insurance, but:
- There are costly deductions
- Policies have limits
- Exclusions mean not all cases are covered
- Management must take time and energy away from their business to work on defending a case
A small business may have coverage for customers who injure themselves on the premises or for employment discrimination claims by workers but not for discrimination claims made by customers.
Small business owners need to know the details of their insurance coverage, including the following:
- Risks they likely face
- Whether they have coverage for them
- How much coverage they have
- Whether it’s enough
They also must own their business through an entity that can shield their personal assets from being used to satisfy a legal judgment against their company.
Talk to your Anaheim, CA international litigation lawyer about the lawsuits your business could face and the insurance you need to cope with them. Get in touch with Focus Law LA today for tailored legal solutions that meet your needs.
