How Discrimination Undermines your Small Business

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Are you an Uber/Doordash driver who has been called a racial slur? Do you know a business that caters primarily to people who look like the owners? Have you seen marketing materials that are derogatory? Have you heard something in mixed company that offended you? Have you seen something on a business website that was objectionable? Discrimination is easy to miss, which is why it happens so often.

Discrimination is also something everyone knows happens, but hopes it happens to someone else. For small businesses it is also something that they hope to avoid because they are small. Is being small enough to avoid embarrassment and public shaming? If something does happen, will it hurt the business? Or should the business just plow on and hope it goes away?

The “Small Business Exemption”

Discrimination is one of those issues that only large companies worry about, or at least that is the common assumption. Small businesses believe they can treat a racial incident like they treat an unhappy customer. They can ignore it and move on.

For a small business, much of the customer interaction is one-to-one so if there is an incident, the people impacted remains small. Those that hear of it would likely not affect any others because most customers do not really know each other.

Small businesses also are less likely to have a large online presence. Hence, customers that have been discriminated against would likely not be able to share their experience widely online. If the business is very small, the entire online presence can even be rebuilt from scratch without too much impact.

The surrounding community could also dismiss the issue because it only involved one small business. It is therefore not reflective of the larger community, that is, it does not reflect on them. It certainly is not reflective of the entire community.

Being small is like being anonymous in a crowd, and being a small business is being anonymous in the community. Ironically, this is one of the challenges for small businesses: to be seen. This also seems to be the dominant thought about discrimination and small businesses, but is that enough? Perhaps for an unhappy customer situation, but for discrimination, it may just be that the issue cuts deeper.

Why Discrimination is Different

It would be a mistake to dismiss an incident as just another unhappy customer. Discrimination has a long sordid history in this country. That history is replete with injustices and unspeakable crimes. That kind of damage lives in the memories of those who have suffered from it.

That one incident is linked to a long list of personal experiences in the lives of people who live with discrimination all the time. Those experiences may not have a direct relationship to the incident that occurred, but the experience is linked to it by history. It is also a unifying link, not just in the minds of the people involved in the incident, but it is also linked with others who have been discriminated against. In the community, discrimination runs deep and wide.

We live in a society where incidents of discrimination are a frequent and regular occurrence. This is because this society is bearing the memory of the cruel abduction and enslavement of Africans, the attempted extermination of American Indians, and the persistent suppression of immigrants, from Chinese to Eastern European to Latin American, for hundreds of years. That suppression persists today, so that one small discriminatory incident is inextricably linked to that long history of injustices.

So no, this is not just another unhappy customer.

Turning the tables

Let us consider this from the perspective of a discriminated person. That discrimination is primarily based on appearances that cannot just be turned off or removed. A person that is discriminated against because of how they look cannot simply act differently to fit in.

This is a reality from the moment that person leaves their home in the morning. From the moment they arrive at work, at a shopping mall, at a doctor’s office, at a school or at an event, and also into that small business where the incident occurred. They are always seen as an other. Everywhere they go, they are treated differently solely because of their appearance.

No amount of education, knowledge, skill, or ability will change that initial preconceived notion from everyone around them that they are different. This is largely because the dominant culture of everyone else around them is not well integrated. Over time, this lack of integration prevents difference from being the norm. That new norm could do so much to address the problems between people.

Where I worked previously, someone noted to me that “black people always dress so sharp.” This was part of a long list of similar comments like “I heard they even iron the inside of their pockets” and “their hair is always so well done; I wish my hair did that.” These were all intended as compliments, by the way, but they are based in ignorance.

As a member of the dominant culture, I just ignored the comments. However, those who were the subject of those comments could not just ignore them. These comments become exhausting, a constant reality that they are different, and this feeling builds up into a long list of grievances. These grievances are then linked to that long history of injustices.

This pressure comes in addition to all the little unspoken events during the day. From the clenching of the purses in the elevator to the extra glance from the office manager when they come to get some office supplies. These constant, and quite likely subconscious, little events throughout the day continue to build up and also become linked to that long history.

To illustrate this exhausting reality, let us consider that you own a small dry-cleaning business. At the end of the day when that person comes in to pick up their clothes on their way home, they are worn out from more than a hard day’s work. To your dismay, the young attendant at the counter that you hired last week happens to use an offensive slur when fetching the clothes. This is now no longer an unhappy customer instance, but a discrimination incident, perhaps in front of other customers as well.

That slip-of-the-tongue is now added to an entire day of micro-aggressions. These are also linked to that long history of systemic discrimination. Depending on the words used, the slur could even have its own sordid history tied to it. Mishandling this incident could be the end of your whole dry-cleaning business.

I am sure your first thought is that this would never happen in your business.

“Nicht im Land von Bertolt Brecht”

Historians have long pondered why the German people were not able to resist Hittler’s most distasteful policies prior to World War II. “Not here, in the land of liberal playwright Bertold Brecht,” was the response. As history shows, ignoring discrimination can have disastrous consequences.

Not in my business, is the go-to response from small business owners when a discrimination incident occurs. The expectation is that it is just an isolated incident, and not at all exemplary of the entire business. If the customers can just let this one incident slide, then we will do the same. We all need to move on, right?

How a small business responds is crucial. It can be expensive, with redactions, marketing, and legal processes, but compared to the loss in sales or maybe even the loss of the entire business, it is likely a necessary expense. At this point, this is more than a moral/ethical decision. It has become a fiscal decision.

Unfortunately, we know that small businesses will often opt for not addressing the issue at all, hiding instead behind their Small Business Exemption clause. I suspect that many small business owners reading this will likely disagree here, but there are just too many examples of small businesses doing just that.

Sweeping the Incident Under the Rug

Last year, I came across the complaint of a black employee of a mobile pet grooming service operating in South Orange County and North San Diego. The comments below are from the employee in a post on the Nextdoor website. Now I cannot confirm the events that are described, but if true, they are descriptive of a business ignoring discrimination and attempting to use the Small Business Exemption.

The employee was a trainee and said she was subjected to repeated racialized comments by another senior employee who was training her. As a superior, this behavior is repressive to lower-level employees. Because of her trainer’s position, any political beliefs that are offensive to the employee become abusive. The decision to share them to continue to debate them at length throughout the workday strongly suggests that this is a hostile work environment.

Some of the racial slurs against Asians that were mentioned were particularly objectionable. The employee relates that her trainer said that she “hates Asians because they drive little Asian cars.” Another example is when the trainer says that Asians “have matted, unsocialized dogs because they leave them outside all day since they can’t eat them anymore.” These are wildly offensive stereotypes that no employee, much less one who is in a supervisory position, should utter in a place of work.

The claimed statements that were apparently made about Blacks were no less offensive. She says that her trainer “hates blacks because apparently [they] commit the most crimes in comparison to other races in America.” There is another black employee that is mentioned as well, who apparently has a lighter complexion. She says that her supervisor felt differently about her because “she was light skinned and thus never felt ‘black’ or a ‘threat’ to her.”

Now, one must wonder why the trainer would even say this to a black employee who has a darker complexion. This type of thinking is typical of the colorism that has been used so often to rank blacks according to the shade of their skin. This is a paradigm that has its roots deep in American slavery. Again, coming from someone in a position of authority, this type of ranking of employees, based on the shade of darkness, is incredibly offensive and inappropriate.

The employee says that her trainer’s statements were not only racist, but more widely discriminatory against others such as transgender people. She said that “it’s her American right to freedom of speech to make them uncomfortable because she is uncomfortable with their existence.” Not only is this again deeply objectionable, but it is eerily reminiscent of the type of discriminatory beliefs that have deep historical roots, not the least of which are with Nazi Germany and its programs of ridding society of undesirable people.

There are many more examples that the employee shares in her post on Nextdoor. They are all deeply disturbing and have their roots in racist propaganda that have a long history in our country. It is not even necessary for the discriminated employee to demonstrate a historical link to make her point, the supervisor is doing it for her through these comments.

How the Small Business Responded

It is important to point out that racism is not the same as discrimination. The correct definition of racism is the furthering of discrimination through a position of power. This is an important distinction because it applies to these particular incidents on several levels. If the offensive behavior had been immediately addressed then this would just have been one of discrimination, but what happened here is more serious.

To begin with, the white supervisor was in a position of power over the black employee, so this issue was already one that should be labeled as racist. The employee’s welfare (ability to work, promotion consideration, transfer to another supervisor, etc.) were all subject to the supervisor’s power over her. As such, this was already a racist incident.

The black employee made repeated attempts to address the issues directly with her trainer. This had no effect. She then brought the issue to the trainer’s supervisor, the manager of the franchise. This manager also ignored the complaint and refused to address it with the trainer or to move her to a different trainer. When the black employee finally reached out to the owner of the business, the issue was again not addressed. At every level, she was rebuffed.

It seems clear that the entire organization was refusing to address the issue at all. The black employee is no longer working there, but she has received no communication from her former employer at any level since leaving. As a matter of fact, the trainer who she says mistreated her has been highlighted several times as a model employee on their website.

Because the discrimination is not just isolated to employees that are equal, but involves all levels of management, it is an incident of systemic racism – racism that exists at all levels of the business. Despite the seriousness of the issue and potential risk to that business, they have decided to ignore it entirely.

Why this Business Cannot Claim a Small Business Exemption

Prior to this incident, the business already had a significant online presence, including on Yelp, Facebook, and Twitter. Reading through the comments, there are several unhappy customers who were dissatisfied with the grooming service they received for their pets – some pets actually having been injured and scarred. Several of the complaints also refer to appointment delays and even complete cancellations (ghosting) by the groomers.

It should also be noted that many of these negative comments have received no follow-up. This suggests that the business has a more serious issue with management not addressing complaints. This should already give pause to those customers looking for a reliable groomer for their pet.

To be fair, there are also many positive comments from happy customers. However, it is the negative ones that stand out. As any marketing specialist will concur, those are the ones that new clients will note. This suggests that the business is not especially responsive to its customers.

Yet, these are all issues that are separate from the discrimination.

The employee that was discriminated against has filed a formal complaint with Fair Housing and Employment. This may take some time to have any impact, but if it is found that the complaint has merit, this will become a significant stain on the reputation of the business going forward.

This will become part of the business’ official public record – a record that anyone seeking to do business with them can discover. Super-imposed on the company’s record of service for pet grooming, this now forms a larger record of the business. Since negative issues are far more noticeable, it becomes an overall negative image.

This image is likely to impact the business’ ability to reach new clients. There is undoubtedly competition in the mobile grooming industry, so this company could lose market share in its geographic location. If anything, this racist incident cannot possibly be good for the company.

More importantly, the business’ record could impact its ability to grow. It may be denied capital funding for expansion. It could also inhibit a sale or merger down the line. Overall, even if the business is not directly impacted by the systemic racism, a negative image could have lasting consequences on its ability to expand and could cause the business to stagnate.

Conclusion

While discrimination is certainly something that a small business can chose to ignore and successfully move past, there are lasting consequences to this decision. It is quite possible that most customers will not be as diligent about researching the public record of a business – sometimes they just need to have their pet groomed in a hurry. Even so, the decision to ignore the issue could very well have a more lasting impact on the ability of a business to grow and expand.

No one goes into business thinking that they just want their business to remain small. Growth leads to greater profits and perhaps even financial freedom for the owners. To prevent hobbling the business, it would behoove owners to work diligently to avoid and address discrimination at all levels.

If the business ignores discrimination from its own employees, they are fostering a hostile working environment. This can only be detrimental, even when the product or service has no racial component (like pets). Pet owners do not want to bring their pets into a hostile work environment – the negative reviews are perhaps symptomatic of a larger problem of neglect.

Diversity, especially in positions of management could go a long way to prevent and address any discrimination, and thereby also the issue of customer trust. Obviously, it behooves the owners to foster a safe and diverse work environment. Even if they are not sensitive to the issue of discrimination, it would still be good for their bottom line to implement changes.

Discrimination has a historical component that no owner should want their business to be superimposed on. The very last thing a business wants is to be associated with the stain of racism. No matter how distant that stain, no matter how many times the business changes hands or names, historical stains remain, as companies like Dollar General, Papa John’s, Starbucks and Bayer who have all weathered backlash for not addressing discrimination properly are all too aware of.

You may not see your fledgling small business growing to become a large company like these corporations, but why limit yourself in any way by not addressing discrimination when it happens? Perhaps the mobile pet groomer mentioned above also does not consider itself in that light either, but it could possibly be bought out by Uber looking to expand into the lucrative business of pet grooming… well maybe not this particular mobile pet groomer.