Power & Market

Employment Discrimination at Starbucks Is a Matter for Private Contracts

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The attorneys for Betsy Fresse have filed a lawsuit claiming that Starbucks fired her for not wearing a “Pride” shirt while working at her New Jersey store. Fresse, a Christian, believes that marriage is between a man and a woman and that the shirt would go against her Christian convictions. Fresse claims never to have discriminated against customers and there is no mention of her actively proselytizing. She simply refused to wear a particular shirt.

Apparently, Fresse’s manager told her that she did not have to wear the shirt; however, she later received a termination notice. Starbucks denies that the refusal to wear the shirt had anything to do with it. A spokesperson for Starbucks said, “Other than our green apron, no part of our dress code requires partners to wear any approved items that they have not personally selected.”

One of the company’s values is “Creating a culture of warmth and belonging, where everyone is welcome.” In addition, their website states, “We’re committed to upholding a culture where inclusion, diversity, equity and accessibility are valued and respected.” Those who take Fresse’s position would argue that Starbucks is acting hypocritically by not being inclusive of traditional Christian principles.

What is the free market, classical liberal view of this situation? Did Starbucks fire her for not being “progressive” or for holding a “bigoted, old-fashioned” view? Or did they terminate her for something related to job performance?

As I have argued before in a mises.org piece, a private company should have the freedom to determine its own policies—hiring, code of conduct, performance requirements, wages, and dress code. A private company does not owe anyone a job—it is a privilege to be hired. Of course, the government would enforce voluntary contracts, and if there were a breach, then the employee would have a case.

Therefore, even if Starbucks made it a requirement to wear a “Pride” shirt, this would not violate employees’ rights because it is not a right to work for a private company. Fresse’s Christian convictions do not trump the company’s right to determine its own policies. Those supporting Fresse might ask, If Starbucks did require employees to wear a shirt with a particular message, isn’t that forced speech and a violation of her free speech right to not wear it?” However, the question ignores that Starbucks is a private employer and that only government and public institutions can violate free speech rights.

Just as homeowners have the right to clearly state and specify the rules of speech and behavior of their guests based on whatever criteria they wish, private employers should have that same right. If a guest violates the agreed-upon rules, the homeowner can order a guest to leave. This would not violate the guest’s free speech rights, or any other rights, since homeowners can create and enforce their own rules and it is a privilege, not a right, to be at someone else’s house. The free market view is that one’s business should operate under the same philosophy as one’s own home. Just as the homeowner is free to determine the “house rules,” as ridiculous, restrictive, or offensive as one might think them, a private business should have the same right. Nevertheless, just as the homeowner could face a situation where nobody might want to come over due to his or her particular rules, a business could face the punishment of the market—customers choosing a competitor.

Fresse’s Christian stand probably was the real reason for her termination, as her view does not fit the Starbucks culture. It would not be a surprise if the Seattle-based company’s CEO and executives did not share the traditional Christian view of marriage and sexuality. Of course, this would also mean not supporting the Muslim or Orthodox Jewish or Mormon positions either. However, I suspect Starbucks would tread more lightly if one’s Muslim beliefs were the basis for refusal to wear the shirt.

Advocates of true “free market capitalism,” including those with deeply held religious views, would not call for government regulation of Starbucks’s hiring even if they were upfront about religious discrimination. If Starbucks’s official policy were “We do not hire close-minded people who believe in an outdated view of marriage and sexuality,” this would not justify government sanction under a classical liberal philosophy. Now, if the government—the only entity that can legally use force—compelled companies to discriminate against a particular group or ordered companies to hold particular philosophical positions or forced employees to wear shirts with particular messages those actions would violate individual rights and undermine true free enterprise.

In a true free market, a private company has the freedom to create and enforce its own policies. If a job applicant disagrees with the philosophy or polices of the private employer, they would simply choose not to work there. Of course, nothing is free, including discrimination. Starbucks would risk the loss of business, with customers voting with their dollars somewhere else, and they would potentially lose excellent, highly qualified employees.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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