Jews and Discrimination Based on Religion or Based on Ethnicity?

The Civil Rights of Act of 1866 (42 U.S.C. § 1981) was interpreted in the late 1960s as prohibiting discrimination even in private contracts based on race. In 1991, Congress expressly included that interpretation in the statute. Because in the late 1800s, "race" was understood to include what today might refer to "ethnicity" (e.g., German, Arab, Jewish), the Court concluded that § 1981 extends to such discrimination based on ethnicity.

But there is no statute generally banning discrimination in contracting (as opposed to specific kinds of contracts, like employment, housing, or public accommodation) based on religion. Section 1981, by its terms, simply doesn't cover religious discrimination.

This was the key behind Domanic v. Christian Bros. Automotive Corp., decided Wednesday by Judge Stuart Kyle Duncan, joined by Judges Andrew Oldham and Cory Wilson; an excerpt:

Christian Brothers Automotive Corporation is a faith-based auto-repair business that franchises only to Christians. All of its more than 250 franchisees—a group which includes some ethnic Jews—are professing Christians. When the company refused to franchise to Evan Domanic, who is an ethnic and religious Jew, Domanic sued for racial discrimination under 42 U.S.C. § 1981….

On appeal, Domanic's main argument is that discrimination against Jews is ipso facto racial discrimination, even when (as here) the differential treatment is motivated purely by religion and not ancestry. We decline to adopt this novel argument, which is in tension with the Supreme Court's longstanding precedent that § 1981 does not reach religious discrimination. The argument is also out of step with the Seventh Circuit, which has twice rejected similar contentions about the indivisibility of Jewish ethnicity and faith under § 1981.

Finally, we also agree with the district court that no evidence suggests that Christian Brothers's franchise policy is a façade for ethnic discrimination against Jews. If there were any evidence of that, of course, then Domanic's § 1981 claim would have to go to a jury. Because there is no such evidence, however, the district court correctly granted summary judgment dismissing Domanic's § 1981 claim….

Christian Brothers describes itself as a "faith-based franchisor of auto-repair stores," whose mission is to "glorify God by providing ethical and excellent service to its customers." This ethos is reflected in the company's branding, website, mission statement, and, of course, its name.

Christian Brothers franchises only to professing Christians. The company asserts that, in forty years of business, it has never offered a franchise to someone not "spiritually aligned with the company and prepared to share a personal Christian testimony." As a result, each of Christian Brothers's more than 250 franchisees professes the Christian faith. It is undisputed that this group encompasses a variety of races and ethnicities and includes at least two ethnic Jews.

Domanic, who is both ethnically and religiously Jewish, applied to open a Christian Brothers franchise in the fall of 2020. {Domanic was one of more than 1,200 applicants in 2020, only twenty-four of whom were ultimately awarded a franchise.} During the ensuing process, Christian Brothers employee Brandon Thomas asked Domanic about his faith. He replied that he is Jewish, not Christian. Domanic alleges Thomas told him religion would not be an issue, something Christian Brothers denies….

Section 1981 provides in relevant part: "All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts … as is enjoyed by white citizens …." The section applies to both government and private actions. See id. § 1981(c) ("The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.").

While § 1981 does not use the term "race," the section has long been understood to "prohibit[ ] racial discrimination in the making and enforcement of private contracts." Section 1981's conception of race is broad: it protects "identifiable classes of persons who are subjected to intentional discrimination solely because of their ancestry or ethnic characteristics." It does not matter that, today, some ethnic or ancestral group (say, Germans or Swedes) might be considered "white" or "Caucasian." The focus is instead on what groups Congress intended to protect when it enacted the law in 1870…. "The understanding of 'race' in the 19th century … was different. Plainly, all those who might be deemed Caucasian today were not thought to be of the same race at the time § 1981 became law." …

It is also settled that § 1981 forbids discrimination on the basis of Jewish ethnicity or ancestry. In Shaare Tefila Congregation v. Cobb (1987), the Supreme Court confirmed that, at the time § 1981 (and its companion, § 1982) were enacted, "Jews constituted a group of people that Congress intended to protect." "Jews and Arabs," the Court explained, "were among the peoples then considered to be distinct races and hence within the protection of the statute." It is immaterial that Jews may be commonly classed as racially or ethnically "white" today. A person of Jewish ancestry can nonetheless sue under § 1981 if he is discriminated against on the basis of that ancestry.

Finally, it is equally settled that § 1981 does not forbid religious discrimination….

[T]he evidence proved without contradiction that Christian Brothers has a longstanding and consistent policy of franchising only to professing Christians. And no evidence suggested that this policy was a pretext for racial discrimination against persons of Jewish ancestry (or any other ancestry). To the contrary, the undisputed evidence showed that Christian Brothers has franchised to two ethnic Jews who are professing Christians.

Domanic does make the novel argument that, as far as § 1981 is concerned, there can be no distinction between discrimination based on Jewish ancestry and discrimination based on Jewish faith. Section 1981, he contends, "protect[s] Jews … regardless of whether they are religious or ethnic Jews." The district court correctly rejected this argument.

To begin with, accepting Domanic's argument would vitiate the established principle that § 1981 does not touch religious discrimination. If Christian Brothers's policy were challenged under § 1981 by members of any other faith, those claims would fail as a matter of law. Yet Domanic asks us to recognize an exception for one faith only—Judaism. The settled law of § 1981 bars us from doing so.

Next, the weight of precedent leans decisively against Domanic's argument…. [S]ister circuit decisions show why Domanic's § 1981 claim fails. Both readily distinguished discrimination based on Jewish ancestry or ethnicity (which is forbidden by § 1981) from discrimination based on Jewish religion (which § 1981 does not address).

In our case, all the evidence points to this being an instance of religious and not ethnic discrimination: Christian Brothers franchises only to professing Christians and, indeed, its franchisees include ethnic Jews who meet that religious qualification. No evidence whatsoever suggests Christian Brothers, behind the façade of a religious policy, is in reality engaging in covert antisemitism. If any evidence suggested otherwise, Domanic's § 1981 claim would have to go to the jury. None does, though….

Some readers, of course, might ask: What if you want to have the Jewish Brothers Diamond Corporation (to play into an accurate stereotype) that franchises only to Jews? Would this violate § 1981? The answer is that if they would franchise to me—an ethnic Jew who is not religious—but not to an equally irreligious non-Jew, then that would be forbidden ethnic discrimination. But if they only franchise to people who practice Judaism, including converts who aren't ethnically Jewish, and exclude people who don't, including ethnic Jews who have converted or are irreligious, then that's religious discrimination, which § 1981 by its own terms doesn't cover. (Whether there might be a First Amendment or Religious Freedom Restoration Act claim of a right to exemption from § 1981, for organizations that have a religious reason for discriminating, is a separating matter.)

Jeffrey L. Oldham, Anne Barry Irvine, and Allison B. Allman (Jackson Walker, L.L.P.) and Scott A. Agthe (Pierson Ferdinand, L.L.P.) represent defendants.