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Religious freedom and marketplace inclusion are two core American policies that affect consumers, employees, and business owners. Religious freedom, granted by the First Amendment to the Constitution, protects individuals’ free exercise of religion and provides freedom from any government mandated religion. Marketplace inclusion, granted by the Civil Rights Acts of 1866 and 1964, protects people from discrimination based on race, color, religion, sex, or national origin. However, when a customer and business owner come from different religious ideologies, conflict may arise and marketplace exclusions may occur.

Recently, the U.S. has been experiencing an upswing in the number of court cases where business owners are being charged for denying service to both heterosexual and lesbian, gay, bisexual, transgender, queer (LGBTQ) customers and employees based on religious grounds. For example, Hobby Lobby—a privately held firm with fundamentalist Christian owners—was brought to court for not providing access to birth control for their employees because birth control is against their religion. Additionally, the owners of a small bakery in Oregon were sued for refusing to bake a wedding cake for a same-sex couple because same-sex marriage is not sanctioned by their religion. The Oregon courts required the bakers pay the couple $135,000 for refusing to bake the cake, as this refusal of service violated the Oregon Equality Act of 2007 which protects LGBT people from discrimination. This month, the Supreme Court ruled 7-2 in favor of a Colorado baker who refused to make a wedding cake for a homosexual couple (Masterpiece Cakeshop vs. Colorado Civil Rights Commission). However, the ruling focused on the cake itself as a form of free speech for the baker, rather than on the debate between religious freedom and marketplace discrimination. A policy dilemma arises in these cases because when marketplace inclusion wins, freedom of religion is restricted, and vice versa.

How can the U.S. simultaneously support both religious freedom and marketplace inclusion for all of its citizens?

With my collaborators (Elizabeth Minton, Frank Cabano, Naomi Mandel, Meryl Gardner, and Esi Elliot) from the Religion track of the 2015 Transformative Consumer Research Conference, we explored these important issues for consumer rights, service provision, and government policies.1 Our core conceptual model suggests that conflicts between religious freedom and marketplace inclusion lead to restricted freedoms for both parties that threaten important identities (e.g., religious identity, LGBTQ identity). In turn, identity threat causes psychological reactance and motivates identity-restoring behaviors, such as the denial of services—in the case of the identity-threatened religious business owner—or pressing charges against the business owners—in the case of the denied LGBTQ customer. The denial of service behavior of the business owner is an expression of freedom of religion aimed at maintaining and upholding one’s religious identity (i.e., not engaging in “sin” or aiding others to do so). The legal action taken by the LGBTQ customer is a demand for marketplace inclusion and a validation of one’s sexual and gender orientation identity. These issues are so intertwined that it is nearly impossible to make policy suggestions that would satisfy both sides and uphold both religious freedom and marketplace inclusion. However, using social identity theory, we propose various policies and interventions that, when implemented, could reduce the instance of identity threat when potential conflicts between religious freedom and marketplace inclusion occur, thereby quelling the reactance process and subsequent identity-restoring (and potentially discriminatory) behaviors.

Federal Equality Act: Reducing Identity Threat and Upholding Marketplace Inclusion

After much debate, our suggestion for policy makers is to mandate marketplace inclusivity where businesses must provide service to all consumers. We also considered a free market system, which would favor freedom of religion, but allow customers to self-select which businesses they patronize (e.g., “put your money where your mouth is”). However, the promise of marketplace inclusion is especially important for discriminated groups, for rural consumers (as there may only be one bakery or other service provider in the vicinity), and for low-income consumers who may lack access to transportation and money to seek out alternative services. Using our model, we propose that a federal marketplace inclusion law would likely reduce the negative consequences of identity threat for religious business owners because by serving all customers the business owners would be following a governmentally-mandated law rather than choosing to participate in identity-incongruent behaviors themselves. In fact, the federal courts are in the process of considering a broadened conceptualization of marketplace inclusion. The proposed Federal Equality Act of the 115th Congress (2017) would amend the Civil Rights Act of 1964 to also prohibit discrimination based on sex, sexual orientation, and gender identity. To date, the bill, proposed by Sen. Jeff Merkley (D-OR) does not have any Republican co-sponsors in the senate. We look forward to seeing how this bill and other court rulings continue to change the dialogue surrounding freedom of religion and marketplace inclusion in the U.S.

We presented this paper at the Marketing & Public Policy Conference and the article was published in the Journal of Services Marketing in a special issue on marketplace discrimination in 2017. For more information on my research stream, please visit: danielemathras.com.

1Elizabeth A. Minton, Frank Cabano, Meryl Gardner, Daniele Mathras, Esi Elliot, Naomi Mandel, (2017) “LGBTQ and religious identity conflict in service settings”, Journal of Services Marketing, Vol. 31 Issue: 4/5, pp.351-361, https://doi.org/10.1108/JSM-05-2016-0196