Come Down & Make Bargains in Good Faith: The Application of 42 U.S.C. § 1981 to Race & National Origin Discrimination in Retail Stores


Plaintiffs who are harassed or otherwise discriminated against in retail stores on the basis of their race or national origin have few options for legal redress. The major federal public accommodations statute, Title II of the Civil Rights Act of 1964, does not cover retail stores. In addition, while some state public accommodations statutes explicitly ban discrimination in retail stores, many others do not. As a result, plaintiffs who have been discriminated against in retail stores have turned to the contracts clause of 42 U.S.C. § 1981.

Section 1981, a Reconstruction-era civil rights statute, guarantees to all people within the United States the same right “as is enjoyed by white citizens” to “make and enforce contracts.” Over time, courts have changed the scope of § 1981, variously expanding and restricting the statute’s coverage. In 1991, Congress amended the statute to extend its requirement of equality beyond the “making” and “enforcement” of contracts to include the “performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” However, many courts have continued to apply the statute narrowly, despite the 1991 amendments that broadened its scope.

This narrowing of the statute places many clear cases of discrimination by retailers outside § 1981’s coverage. It is wrong as a matter of statutory interpretation and contract law. It is also wrong as a matter of history, at odds with the development of property and contract law over time.

This paper examines and critiques courts’ narrow § 1981 jurisprudence, and offers a model for improved § 1981 decision-making. It argues that the “right to contract” protected by § 1981 is a process rather than a moment. The statute protects the entire contractual relationship between customer and store: entering, browsing or sampling the goods available, interacting with store personnel, completing a purchase, and finally exiting the store. It also asserts that stores provide services as well as goods, and § 1981 demands that those services be provided equally to all customers, regardless of their race or national origin. Finally, it argues that § 1981 cannot be interpreted as mandating equal access, but then permitting unequal treatment at all points except the checkout counter. Congress attempted to broaden § 1981 in 1991 to correct this very mistake in logic; today’s courts have continued to interpret the statute, and the retail contracts on which the statute pivots, narrowly and improperly.


Civil Rights and Discrimination | Law and Society

Date of this Version

March 2006