A. PROPOSALS FOR FEDERAL LAW
The primary change that is necessary in federal law is to add retail stores to Title II's coverage. Given that retail stores have become essentially immune to federal liability for discrimination and that, in many states, retailers can also discriminate freely without repercussion; Title II fails to achieve its goal of eliminating racial discrimination in American businesses. Senator Humphrey's belief that money knows no race, and that capitalism would eliminate racism in retail stores, has been proven incorrect and should not prevent Title II from providing the same protections as the vast majority of state public accommodation statutes, as well as the Americans with Disabilities Act, which does include retail stores as places of public accommodation for its purposes.
In addition to legislative changes adding retail stores to Title II, judicial changes need to be made to § 1981 adjudication. Since § 1981 applies to all “phases and incidents” of the contractual relationship, discrimination that occurs before the contract is actually formed (i.e. before the shopper brings goods to a sales clerk to make the purchase) should at least manage to survive a motion to dismiss. If Congress in fact sought to protect all phases of the contractual relationship, black shoppers should be covered by § 1981's prohibition of racial discrimination the moment they enter a retail store. Shoppers enter stores for the purpose of browsing and purchasing items. Retail stores hold themselves out to the public for the purpose of making contracts. When a black shopper goes to a retail store, the standard should not be whether the retailer managed to offend the shopper enough that she left before she could attempt a contract. It should be whether the shopper could go about contemplating and making a contract without discrimination or harassment. Congress acknowledged that this should be the true gatekeeper for the statute in 1991 when it amended § 1981 to protect all “benefits, privileges, terms, and conditions of the contractual relationship.” However, under the current standard for § 1981, stores may still discriminate against black shoppers who may seek to make a contract but who had merely failed to arrive at the contract initiation point. To correct this problem, courts need to adopt a test similar to the Sixth Circuit's that acknowledges that discrimination can occur during the formation of a contract and yet not prevent the contract from occurring. A test that focuses on whether the retailer's behavior was objectively hostile and discriminatory, regardless of whether the shopper completed the contract is the only way to prevent a black shopper who experiences discrimination from being placed in a Catch-22. After all, under current law, if he abandons his purchase in disgust, he does not have a § 1981 claim because he left of his own accord, and if he endures the discrimination and goes through with the purchase, he still does not have a § 1981 claim because he was not prevented from making a contract. For § 1981 to have teeth in the retail setting, it must apply to all discrimination during the formation of a contract, not just that which makes contracting impossible.
