How Nightclub Cover Charges Sparked Discrimination Claims [e234]

October 28, 2015

Nasir and Matt discuss how a Houston nightclub is facing claims of discrimination for charging customers different cover charges based on their race.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist. My name is Nasir Pasha and here we have our expert on clubs and nightlife in Houston, Texas.

MATT: That’s you?

NASIR: No, that’s you.

MATT: I’m not in Houston. I’m Matt Staub. I’m definitely not in Houston.

NASIR: No, but you’re an expert in clubs and nightlife in Houston, that’s why we got you on. If you’re not, then I don’t even know why, I thought that was what you were bringing to the table here.

MATT: That’s the guest, yeah. Well, I think I’ll be able to do a better job than their attorney that was interviewed for this.

NASIR: Yeah.

MATT: We’re too deep into it now and I had an awesome start to this episode and now it’s too late.

NASIR: No, let’s just all just restart. Okay. I say something like, “Welcome to the podcast. We’re awesome and I’m Nasir Pasha.”

MATT: And I was going to say, “Houston, we have a problem.”

NASIR: But, if you say that, it’s like, every time Houston comes up, then you could say that.

MATT: It doesn’t come up that often.

NASIR: That’s true.

MATT: This is a pretty interesting case – it’s not a case, I guess, but it’s a pretty interesting d rgeur Teko oafe that happened. As the Houston nightclub expert, I first heard about this weeks ago but there was rumors of racism in these nightclubs meaning that they were giving preferential treatment to basically it sounds like preferential treatment to white people in charging other ethnicities certain money, things like that to get in, VIP, et cetera. A local news station, Channel 2 Investigates, tested this out and they sent groups of people at different times of the night to a few different clubs. I think most of them were okay but there was one, GasLamp, this is where they really ran into a problem. What they did is they sent a group of white people, a group of black females – both of those groups didn’t have to pay any money. They sent a group of Hispanic females, I think they got in free as well but had to pay…

NASIR: The VIP or something?

MATT: They sent black males in, I think they had to pay a cover just to get in. So, it got increasingly worse. They were even asking follow-up questions with the bouncer and things like that. Basically, at the end of the night or whenever they all gathered together the next day, they looked at it and said all the white people basically got in for free and got full access to everything and the non-white people, some of which got in for free as well, some of which had to pay extra to be in the VIP, some of which had to pay just to get into the nightclub, so this is kind of a problem that we’re not going to put up with. What happens is they ask the owner of the nightclub and he says something along the lines of, “We don’t charge money to good-looking people to pay in,” and then their lawyer comes in and says a bunch of bad stuff saying, amongst other things, you know, “We want successful people in here.”

NASIR: Yeah.

MATT: Also, misquoting the law multiple times but basically that was the one statement I heard is, “We just want successful people in here. We want good-looking girls in here. And so, we can do whatever we want basically,” and there’s a lot of problems with this but that’s kind of where we start.

NASIR: That’s what happened in the last couple of weeks but this actually goes back about a month ago. There were these three attorneys. I think they were all black.

MATT: Yeah.

NASIR: And, somehow, they noticed this was going on. I guess they sat outside and just watched every white person, according to them, white person get in for free and non-white being charged, et cetera. And then, they made a hoopla about it on social media and it got picked up by the press and their Yelp page, the GasLamp’s Yelp page went crazy and so forth. I was considering covering this a month ago and then it resurfaced this last week so I thought that was funny. But there’s this attorney, I don’t know him, his name is Sutherland or whatever and that’s the attorney that Matt’s referring to that was interviewed but, apparently, there’s this one write-up, it’s called Above the Law or a blog on Above the Law, it’s a popular legal blog and this guy describes this video that apparently Sutherland released which I’m accessing now – apparently, it’s been taken down, did you notice that?

MATT: I couldn’t get to it either.

NASIR: But he mentions how Sutherland claims at around 2:44 the fact is that federal discrimination law does not cover nightclubs which is like the most ridiculous statement to say and I think what he’s trying to say is that, you know, nightclubs don’t apply because it’s a private club. It’s not a place of public accommodation which, again, is not true. The reason why he’s trying to say that is because, if you’re a restaurant or a place that’s considered a public accommodation – which, by the way, a nightclub is – then you can’t discriminate based upon all those different classes of people that we all know about which is, of course, one of them is race. If you’re a place of public accommodation and you’re discriminating based upon the color of one’s skin – whether it’s charging one and not charging the other – then you’re just asking for it. Whether a part of that basis is based upon what they’re dressing or not, if any part of your decision-making is based upon the color of your skin, then you’re going to have a problem.

MATT: I guess there’s still a little bit of room for interpretation but Title II of the Civil Rights Act is pretty clear, paraphrases here, “outlawed discrimination based on race and hotels, motels, restaurants, theatres, all other public accommodations engaged in interstate commerce.” I mean, there is exempted private clubs but I believe how it falls down as a private club, there has to be some sort of ongoing membership fee, something like that. I mean, it definitely does not fall under that exemption.

NASIR: That’s the thing. Private clubs and what’s a public accommodation and what’s not? I’m pretty certain it’s been well-litigated. I’d be concerned about having an attorney that makes that kind of claim. I mean, some of these statements are just so silly. Like, he says also, apparently, you need a local ordinance or state law to stop it and give people a way to make a claim like in every other big city in the United States and he goes on to say, “Do your job. Get educated and make it so that there’s a common ground between your beliefs and the world that you live in,” basically saying, “Just because you think it’s morally wrong doesn’t mean that it’s legally wrong.” There’s definitely something amiss there.

MATT: And I believe there’s a section of the Houston Municipal Code that already prohibits race-based discrimination in places of public accommodation.

NASIR: There you go.

MATT: I guess maybe he should have done his own job in doing that. I mean, I wish I could see the full video. We both watched that little excerpt from the news story. He only talked for 20 seconds and it was already bad enough.

NASIR: Yeah.

MATT: I can’t imagine what he said in this full-on five-minute video or however long it was, and why does he even feel the need to post a video about this?

NASIR: I don’t know. It does seem strange – at least think about it a little bit more before you release some of this because, once it’s out there, it’s out there. Nonetheless, you know, let’s talk about nightclubs. You can discriminate. You just can’t discriminate for reasons of protected classes. So, when the owner says, “We don’t discriminate; we just choose people based upon their dress,” technically, that’s okay. You can create an environment to promote a certain feel and lifestyle within your club. But it’s a dangerous game you’re playing, especially when you’re giving so-called bouncers the discretion whether to charge a fee or not.

MATT: Yeah.

NASIR: And it goes to, for example, even ladies’ night is problematic in some states. In Texas, it’s not, and ladies’ night is typically women get in for free, right? Usually. Then, the men are charged, or something to that effect, right?

MATT: I don’t go to ladies’ nights too often but I’ll take your word for it. It’s a ladies’ night; it’s not a coed.

NASIR: No, I just read about it.

MATT: I think ladies’ night usually it’s like free drinks or cheaper drinks for women – something like that.

NASIR: Something like that.

MATT: Yeah.

NASIR: In California, New York, and many other states, they’ve established under state law that, you know, under different statutory protections that that kind of discrimination against men in this case is not permitted whereas many other states, in Texas, I haven’t seen any cases that have gone the other way. I’m just trying to demonstrate that even things like that that some people may say that it is a so-called positive thing – it’s not like they’re trying to keep men away, they’re just trying to bring more women in – even something like that can be scrutinized by the law.

MATT: Yeah. You know, if you’re going to do a policy with this cover, you just have to do it right. You know, some places will start charging a cover after 10 p.m. or something. In that case, you’re “only discriminating against people that are late or arriving early.”

NASIR: If you’re concerned about dress, then you can have a dress code.

MATT: Yeah.

NASIR: That’s why it’s strange. Forget about whether they’re actually doing this. There’s these allegations and, frankly, just because you have one story where some people got in for free and some people didn’t, to really know whether they’re discriminating, you can’t just use one incident. I don’t think most people know and maybe these three lawyers felt that one night observing – assuming that’s what they did – is enough. In order to prove something like that to a jury, you really need to have some statistical analysis to determine that. But, putting that aside, giving the decision to a bouncer to make these kind of very discretionary, giving them full discretion of whether to charge a cover charge or not, even what price to charge, is just a stupid idiotic mistake. I don’t care what kind of training you have in that particular bouncer. Everyone has their own prejudices and biases that sometimes will just come out subconsciously.

MATT: Yeah, and sometimes bouncers just really get empowered by the position they have of being able to decide who comes in, who doesn’t. If they do have this charging discretion for covers, then a whole other story. I’m going to contradict what I said in Monday’s episode about creating the policy is easy part, implementing it is the hard part. I think it might be the flip here in that maybe it’s creating the policy would be the hard part. Well, it’s not even going to be that hard. You just implement a policy that’s not discriminatory based on these different categories.

NASIR: Yeah, that’s objective, that doesn’t require any kind of level of thinking for that matter. Honestly, if you ask me what a nightclub is or what’s inside, I honestly don’t even know how to describe it to you.

MATT: Your guess of what it is would be fairly accurate.

NASIR: Okay. I have no idea but the point is that I didn’t think that this kind of movie-like discriminatory bouncers saying “yea” or “nay” to people, I thought that was just like a movie myth. I mean, this actually happens, I guess, right?

MATT: Yeah. I mean, I think it’s most rampant in Las Vegas where, if you go to a club in Las Vegas and it’s all guys, it’s going to be very difficult to get in and, if you are going to be able to get in, you’re going to have to agree to pay a lot of money at the door or agree to buy a bottle of alcohol when you get in or a VIP table or something. The most I’ve seen it is there but, like I said, I’ve been to nightclubs – unlike you – but I really don’t frequent them. I have no need, no desire to really go at any point, even when I’m in Vegas.

NASIR: Have you ever been rejected because of the way you were dressed or looked?

MATT: I have been rejected before but it’s nothing – I mean, it’s part of the dress code. A couple of times, I wasn’t wearing shoes; I had sandals on.

NASIR: No shoes.

MATT: I didn’t just show up shoeless to a place – barefoot. Sandals and not shoes and maybe I’ve worn a hat somewhere before and you can’t get in with a hat. But, yeah, never for…

NASIR: Never for your personality or looks?

MATT: Yeah, that I know of. I’m trying to think. I guess there’s been times I’ve waited in line. It’s kind of a one-in, one-out policy but, to my knowledge, I’ve never been turned down for anything that’s how I’ve looked.

NASIR: Okay. Well, I’m surprised about that, actually, but I’ll take your word for it. You’re lucky I wasn’t the bouncer at any of those clubs that you went to.

MATT: Show up barefoot to places, expecting to get in.

NASIR: Very good. Well, it’s an interesting story. I don’t even know… has there even been a lawsuit filed?

MATT: I don’t think so. I was going to mention one more thing. I had to screenshot it because I didn’t know whether it would be taken down or not. Once I read this, I went to their Yelp page.

NASIR: Oh, yeah, I saw that.

MATT: They had one and a half stars. At the time when I did it, over 200 reviews. But they had this thing, I’d actually never seen this before in a Yelp page, it basically kind of blocks their whole page but you can still kind of see and read some of the reviews but it was an active cleanup alert. Basically, they got an insane amount of traffic because they’re “racist” and so people just flooded their Yelp page, posting all these one-star reviews. Yelp apparently is in the process of sorting through these and finding out which ones are legitimate and which ones aren’t maybe.

NASIR: Which is fair.

MATT: Yeah, that’s fair.

NASIR: That’s what Yelp should be doing.

MATT: It should happen to that pizza place in Indiana.

NASIR: Yeah, precisely, exactly. Or that one on Chef Ramsay’s show, that one.

MATT: Ann’s Bakery or something?

NASIR: Ann’s Bakery, yeah. I bet she would have wished they had something like that at that time.

MATT: Yeah, definitely.

NASIR: Because, whether they were actually being racist or not, people are going to go on Yelp and complain and poorly rate them just because of the allegations so who knows actually if it’s true or not?

MATT: Yeah, and I was reading through the ones that I could read and, you know, you don’t know how much of this is true but they’re like, finally, they’ve been exposed. I experienced this as well but they’re only now conveniently posting on there.

NASIR: I kind of believe it, honestly, because on Reddit is where I first saw it – in the Houston Reddit – and I was reading the comments and there were some very detailed descriptions – again, anecdotal. Just because you’re black and you get charged a cover charge or get denied doesn’t mean that they’re being racist. It could just be in that circumstance because you were wearing a hat like Matt was. Like I said, I mean, the policy itself is bound to be discriminatory so, in that respect, I have no real sympathy for this club. They want to create this dream atmosphere and it’s really backfired. Well, I think I’m going to go have some dinner.

MATT: It’s Thursday night in Houston. You’re going to go to the GasLamp.

NASIR: Yeah. I mean, hopefully they have some food there, see if I can get it.

MATT: They might have temporarily shut down. I think I saw somewhere else.

NASIR: Did they? Well, in the news article, they did say that they’ve temporarily suspended all cover charges and outside the door but then the VIP is still different or something to that effect. I don’t know.

MATT: Ah. Well, yeah, just let me know after you go there tonight.

NASIR: Yeah, I’ll meet you there, in fact.

MATT: All right. Keep it sound and keep it smart.

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A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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