The Civil Rights Act of 1866, codified at 42 U.S.C. § 1981, was understood in the late 1960s to bar discrimination in private contracts on the basis of race. In 1991, Congress expressly affirmed that interpretation in the statute. Because, in the late 1800s, the concept of “race” encompassed groups we would today describe as ethnic (for example, German, Arab, Jewish), the Court held that § 1981 reaches discrimination grounded in ethnicity as well.
However, there is no federal statute that broadly forbids contracting discrimination on account of religion (unlike prohibitions that cover specific contexts such as employment, housing, or public accommodations). By its own terms, § 1981 simply does not address religious discrimination.
This limitation was the backdrop to Domanic v. Christian Bros. Automotive Corp., a decision issued on Wednesday by Fifth Circuit Judge Stuart Kyle Duncan, with Judges Andrew Oldham and Cory Wilson joining; an excerpt follows:
Christian Brothers Automotive Corporation operates as a faith‑based auto‑repair franchisor that grants franchises only to Christians. Its network, numbering more than 250 franchisees—some of whom are ethnic Jews—consists exclusively of individuals who profess the Christian faith. When the company declined to grant a franchise to Evan Domanic, an individual who is both ethnically Jewish and Jewish by religion, Domanic brought a § 1981 claim alleging racial discrimination….
On appeal, Domanic’s central argument was that discrimination against Jews is ipso facto racial discrimination, even when the differential treatment is motivated solely by religion rather than by ancestry. We declined to adopt this novel theory, which conflicts 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 treating Jewish ethnicity and faith as indivisible for purposes of § 1981.
Moreover, we agreed with the district court that there is no evidence suggesting Christian Brothers’ franchise policy serves as a façade for ethnic discrimination against Jews. If such evidence existed, Domanic’s § 1981 claim would have to proceed to a jury. Because no such evidence appears here, the district court correctly entered summary judgment dismissing the § 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 creed is reflected in the company’s branding, its website, its mission statement, and of course its name.
Christian Brothers franchises solely to professing Christians. The company maintains that, throughout its forty years in operation, it has never offered a franchise to anyone who is not “spiritually aligned with the company and prepared to share a personal Christian testimony.” As a result, every one of Christian Brothers’ more than 250 franchisees professes the Christian faith. It is undisputed that this group includes people of varied races and ethnicities and includes at least two ethnic Jews.
Domanic, who is both ethnically and religiously Jewish, sought to open a Christian Brothers franchise in the fall of 2020. {Domanic was one of more than 1,200 applicants that year, with only twenty‑four ultimately receiving a franchise.} During the process, a Christian Brothers employee, Brandon Thomas, asked about Domanic’s faith. He responded that he is Jewish, not Christian. Domanic alleges that Thomas told him religion would not be an issue, an assertion 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 statute applies to both governmental 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 word “race,” the provision has long been understood to prohibit racial discrimination in the making and enforcement of private contracts. Section 1981’s conception of race is expansive: it guards “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 groups (such as Germans or Swedes) might be deemed “white” or “Caucasian.” The focus is on what groups Congress intended to protect when the law was enacted in 1870… “The understanding of ‘race’ in the nineteenth century … was different. Plainly, all those who might be considered Caucasian today were not regarded as belonging to the same race when § 1981 became law.” …
It is also settled that § 1981 bars 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 noted, “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 classified 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 also settled that § 1981 does not bar religious discrimination….
[T]he record showed without contradiction that Christian Brothers maintains a long‑standing and consistent policy of franchising only to professing Christians. And there was no evidence suggesting that this policy was a pretext for racial discrimination against Jews (or against any other group). To the contrary, the undisputed evidence demonstrated that Christian Brothers has franchised to two ethnic Jews who are themselves professing Christians.
Domanic does press the novel theory that, for § 1981 purposes, there can be no distinction between discrimination based on Jewish ancestry and discrimination based on Jewish faith. He contends that § 1981 “protects Jews … whether they are religious or ethnic Jews.” The district court rightly rejected this theory.
First, accepting Domanic’s argument would undermine the established principle that § 1981 does not touch religious discrimination. If Christian Brothers’ policy were challenged under § 1981 by members of any other faith, the claims would fail as a matter of law. Yet Domanic asks us to recognize an exception for one faith—Judaism. The settled law of § 1981 forbids such an approach.
Second, the balance of authority strongly disfavors Domanic’s argument. [S]ister circuit opinions illustrate why his § 1981 claim fails. They readily distinguish discrimination based on Jewish ancestry or ethnicity (forbidden by § 1981) from discrimination rooted in Jewish religion (not addressed by § 1981).
In this case, all the evidence points to a purely religious rather than ethnic form of discrimination: Christian Brothers restricts franchising to professing Christians and, indeed, its franchisees include ethnic Jews who satisfy that religious criterion. There is no indication that, behind a religious policy, the company is secretly engaging in antisemitic conduct. If such evidence existed, Domanic’s § 1981 claim would have to go to a jury. It does not….
Some readers may wonder: What if there were a “Jewish Brothers Diamond Corporation” that franchised only to Jews? Would that violate § 1981? The answer is nuanced. If a company would franchise to me—an ethnic Jew who is not religious—but would not franchise to an equally irreligious non‑Jew, that would constitute forbidden ethnic discrimination. But if they restricted franchises only to individuals who practice Judaism—including converts who are not ethnically Jewish—and excluded others, including ethnic Jews who have converted or who are irreligious, then that would constitute religious discrimination, which § 1981 does not address. (Whether there might be a First Amendment or Religious Freedom Restoration Act right to exemption from § 1981 for organizations with a religious motive for discrimination is a separate question.)
Jeffrey L. Oldham, Anne Barry Irvine, and Allison B. Allman (Jackson Walker, L.L.P.) and Scott A. Agthe (Pierson Ferdinand, L.L.P.) represented the defendants.
