Discrimination and Freedom of Contract
| Published date | 01 March 1999 |
| DOI | 10.1177/135822919900300404 |
| Date | 01 March 1999 |
International .Tournai
of
Discrimination and the Law, 1999, Vol. 3, pp. 269-297
1358-2291/99 $10
© 1999 A B Academic Publishers. Printed
in
Great Britain
DISCRIMINATION
AND
FREEDOM
OF
CONTRACT
·Philosophical and Economic Foundations of the Law against
Racial Discrimination
in
Employment
SAMANTHA A. BESSON*
University
of
Fribourg, Switzerland
ABSTRACT
The aim
of
this article is to clarify the apparent antithesis between the fundamental
private autonomy
of
the contractual parties and the right
of
a party not to
be
dis-
criminated against and found anti-discrimination
law's
legitimacy in philosophy and
economics.
The
purpose
of
reviving this controversy derives from a recent attack
from some
of
the scholars
of
the
'law
and economics' movement on anti-
discrimination law, and from Richard Epstein's Forbidden Grounds in particular.
Within the efficiency rationale discourse it is in reality the freedom
of
contract
principle which is reassessed as being fundamentally violated by anti-discrimination
law. The study tackles the problem by, first, analyzing potential philosophical
foundations, denying any plausibility to Epstein's derived libertarianism and sup-
porting Gardner's autonomy-based perfectionism, and, secondly, presenting effici-
ency-based foundations
of
anti-discrimination law, leading to the conclusion that
anti-discrimination law may lead to efficient results by speeding-up the market pro-
cess. The final aim
of
the study is to reconcile anti-discrimination policy and free-
dom
of
contract within both a market- and a social-sensitive contract theory, such
as the 'Social Market' Theory that conceives
of
freedom
of
contract as autonomy-
based and thus conditioned upon the respect
of
the prohibition
of
discrimination.
INTRODUCTION
The aim
of
this article is to clarify the persistent and controversial
issue
of
racial discrimination in employment contracts. There is an
apparent antithesis between the fundamental private autonomy
of
the
contractual parties,
or
the freedom to conclude an employment con-
tract
or
not, and the right
of
a party not to
be
discriminated against
or to be treated as an equal. Anti-discrimination law necessarily inter-
feres with freedom
of
contract and, more generally, liberty rights
* M.Jur (Oxon.), Lic.iur. (Fribourg), Dr.iur. student (Fribourg).
270
necessarily conflict with equality rights because the former create a
sphere
of
individual autonomy whereas the latter intrude on it.
In a way, every single act
of
contracting involves discrimination
because
if
someone chooses to contract with someone else, then the
former will not be able to contract with anyone else on the same
terms. This type
of
'endemic discrimination'1 in a market constitutes
an innocuous use
of
one's
freedom
of
contract and will therefore not
be
our
concern. This article will focus on more specific and invidious
forms
of
discrimination and it is to these that 'discrimination' will
hereinafter refer.
Invidious discrimination2 is generally based on ascriptive char-
acteristics
of
a potential contracting partner, such as race.3 But the
question
of
what makes these grounds
of
discrimination 'irrational'
is extremely controversial; the use
of
discriminatory grounds such as
race can sometimes be rational, as in the case
of
use
of
reliable
indicators
of
ability in statistical discrimination.
So
one must, first,
explain why, even where there are reasons for discriminating, it is
wrong to act on them. Secondly, one must legitimize4 the restriction
imposed on a potential contracting partner's freedom
of
contract,
either by a moral or philosophical justification
or
by efficiency-based
arguments and this is the aim
of
this article. Coercion in the private
sphere or any limitation
of
private autonomy by the state should be
theoretically founded.5
The purpose
of
reviving this controversy derives from a recent
attack by some
of
the scholars
of
the
'law
and economics' movement
on anti-discrimination law, and by Richard Epstein's Forbidden
Grounds6 in particular. According to them, residual private discrim-
ination, as the expression
of
a legitimately unrestricted freedom
of
contract, is often rational and efficient in an economic sense. Anti-
discrimination law thus distorts competition in the market and even
produces negative and contrary effects on the victims
of
discrimina-
tion. Epstein has gone as far, in his provocative book, as to advocate
the repealing
of
Title VII
of
the Civil Rights Act and 'imperialist'7
private anti-discrimination law.
Within the efficiency rationale discourse it is in reality the free-
dom
of
contract principle which is reassessed as being fundamentally
violated by anti-discrimination law.
At
first sight, the resurgence
of
this principle within the discrimination debate may look awkward,8
but this is mainly because, in the Anglo-American legal orders, as
opposed to some civil legal orders like the Swiss one, anti-
discrimination law was developed during the 1960s while freedom
of
contract was declining and their mutual relationship has never been
perceived as antithetical until recently due to the economic critiques.
Freedom
of
contract requires that individuals should be given
the choice whether or not to enter a contract. The concept has
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