NJLAD’s “Refusal To Do Business” Provision Prohibits Conditioning Business on Submission to Sexual Advances

J.T.’s Tire Service, Inc. v. United Rentals North America, Inc. et al.,  No. A-2989-08T2 (App. Div., January 6, 2010) – Although most employers are aware that the New Jersey Law Against Discrimination (NJLAD) prohibits employment discrimination on the basis of sex, a lesser known provision of the NJLAD, N.J.S.A. 10:5-12(l), also prohibits discriminatory refusals to do business on the basis of sex. In this case, the plaintiff’s sole owner Eileen Totorello brought suit for discriminatory refusal to do business under N.J.S.A. 10:5-12(l) after the defendant’s branch manager ceased doing business with her because she refused his sexual advances.

The Appellate Division rejected the defendant’s argument that sexual harassment is not prohibited sex discrimination for purposes of section 12(l) of the NJLAD, and that “women business owners do not need protection against sexual harassment by those with whom they do business.” It is well-settled that sexual harassment is a form of sex discrimination under both the NJLAD and Title VII, and the court therefore had “no hesitation” concluding that allegations of a refusal to do business due to rejection of sexual demands state a cause of action under 12(l).