Discriminatory Discounts Legal?

[14jchan]

What is the name of your state? California

Recently, I was browsing some sites, and they were offering discounts to black-owned businesses. I have nothing inherently against that, and I don't want to get into the politics of that, but I was just curious as to the legality behind something like this. There are certain anti-discrimination laws that are applied, but I am not sure if they apply to private businesses. For example, I do know that a lawsuit was filed (although I am not sure of the status and final decision outcome) of people in California who sued Uber because they charged no delivery fee to blacked owned restaurants, thus giving them an unfair advantage.

I just got curious, because I am a web-developer, and recently was browsing this site ( link removed) in case this forum block the URL due to security reasons). They are giving out a discount package to startups, but additional special advantages only if you are a black startup CEO. I was just wondering if that is at all legal?

Thanks!

 

[quincy]

What is the name of your state? California

Recently, I was browsing some sites, and they were offering discounts to black-owned businesses. I have nothing inherently against that, and I don't want to get into the politics of that, but I was just curious as to the legality behind something like this. There are certain anti-discrimination laws that are applied, but I am not sure if they apply to private businesses. For example, I do know that a lawsuit was filed (although I am not sure of the status and final decision outcome) of people in California who sued Uber because they charged no delivery fee to blacked owned restaurants, thus giving them an unfair advantage.

I just got curious, because I am a web-developer, and recently was browsing this site: [link removed] in case this forum block the URL due to security reasons). They are giving out a discount package to startups, but additional special advantages only if you are a black startup CEO. I was just wondering if that is at all legal?

Thanks!

There is nothing inherently illegal in offering discounts to selected groups. AARP does this.

 

[Taxing Matters]

There is nothing inherently illegal in offering discounts to selected groups. AARP does this.

But providing discounts based on RACE will for most businesses will violate federal law and the laws of many states, including California.

AARP is a different situation in that AARP does not itself provide discounts to members. It partners with other businesses which agree to offer discounts to its members. It is up to the partner business to determine if that discount would cause it to violate the law. While it is illegal under federal law for a business to discriminate based on RACE, it is not illegal under federal law to discriminate based on AGE. It is illegal under some state laws for a business to discriminate based on age, and the details of those state laws would then be what those partner businesses must concern themselves with.

Note that the rules for discrimination by businesses and discrimination by employers are different under federal law. Age is a protected category in federal law in employment. It is just not protected in the business-customer setting.

To 14chan: Here whether the site is violating federal or state law will depend on the exact details of the business and what it is doing. Federal court decisions are mixed regarding whether web site only businesses are places of public accommodation, and to be subject to the federal Civil Rights Act of 1964 the business must be a place of public accommodation. So the business in this situation would escape violating federal law if it fails to meet the definition of a place of public accommodation. State laws, however, may apply more broadly, so even if it doesn't violate federal law, it might still violate state law. In that case, of course, it matters in what state(s) it is offering the discounts.

 

[quincy]

Right. But there is nothing inherently illegal in offering discounts to some groups and not to others. Which is what I said. Specifics, as you have nicely pointed out, matter.

 

[Taxing Matters]

Right. But there is nothing inherently illegal in offering discounts to some groups and not to others. Which is what I said.

I agree with that, but I think if you reread your answer in context with what 14chan wrote you'll likely agree that it gives the impression that what this business is doing in offering discounts based on race would be legal too, since you didn't qualify your statement in anyway. Thus the reason for my response.

 

[quincy]

I agree with that, but I think if you reread your answer in context with what 14chan wrote you'll likely agree that it gives the impression that what this business is doing in offering discounts based on race would be legal too, since you didn't qualify your statement in anyway. Thus the reason for my response.

Taxing Matters: I don’t argue with what you said in your lengthy response but my statement was qualified by using the word “inherently.” Not all discrimination is illegal.

More facts are needed to see if the particular discount of concern can be viewed as illegal discrimination.

Because you apparently did not have the benefit of viewing the linked-to technology website, which offers to qualifying startups free limited-time access to their technology, the company is actually offering this “discount” in collaboration with a program set up by a coalition of existing tech companies.

This particular technology company is offering free technology otherwise unavailable and/or unaffordable to small businesses upon eligibility and application. Businesses must apply for the program discount and are eligible only if they meet certain conditions (e.g., less than 150 employees, less than $X in venture capital funding).

The program itself focuses on startups by Black founders to address the disparity in venture capital funding for Black and Latinx founders in comparison to non minority groups. I have sent you a private message with identifying information.

To 14jchan: Doordash and Uber Eats ended their free delivery incentive (and other perks) to Black-owned businesses in Arizona after Arizona’s Attorney General sued them over discriminatory practices. The settlement agreement in the case was reached in May of this year. No fault was admitted by either Doordash or Uber and neither admitted to being places of public accommodation. Here is a link to the settlement agreement:
https://aboutblaw.com/XQd

Whether there will be a legal challenge to the program created by the technology companies, or whether such a challenge can be successful, is a question mark. You can consult with a civil rights attorney in your area for a review of all facts.

 

[Taxing Matters]

More facts are needed to see if the particular discount of concern can be viewed as illegal discrimination.

Yes. I've already said that myself.

Because you apparently didn’t have the benefit of viewing the linked-to technology website,...

You're right, I didn't have the chance to see it; the link was removed before I saw this thread. Thanks for the additional information.

Doordash and Uber Eats, by the way, ended their free delivery incentive (and other perks) to Black-owned businesses in Arizona after Arizona’s Attorney General sued them over discriminatory practices. The settlement agreement in the case was reached in May of this year. No fault was admitted by either Doordash or Uber and neither admitted to being places of public accommodation.

Right. That's an example of why discounts based on race often can be a problem for businesses, even if their underlying goal of helping minority businesses may be a laudable one.

Whether there will be a legal challenge to the program created by the technology companies, or whether such a challenge can be successful, is a question mark. You can consult with a civil rights attorney in your area for a review of all facts.

I'm assuming this part was directed at the OP, and not me.

 

[quincy]

... I'm assuming this part was directed at the OP, and not me.

Yup. I’ll edit my post to make that clear.