The United States Court of Appeals for the Fifth Circuit has upheld a ruling that dismissed a racial discrimination lawsuit filed by Evan Domanic against Christian Brothers Automotive Corporation. The court ruled that the company's franchise policy, which only allows Christians to operate its franchises, does not violate federal law regarding racial discrimination under 42 U.S.C. § 1981. This decision impacts individuals seeking to enter the auto-repair business under similar franchise agreements.
The case, Domanic v. Christian Brothers, was filed in September 2026 and centers around Domanic's claim that he was denied a franchise opportunity due to his Jewish ethnicity. The court's decision is significant as it addresses the intersection of race, religion, and business practices, and clarifies the legal boundaries of discrimination claims in the context of religiously affiliated businesses.
Background
Evan Domanic, an ethnic and religious Jew, applied to open a franchise with Christian Brothers Automotive in late 2020. The company, which operates over 250 franchises nationwide, has a policy of only granting franchises to professing Christians. Domanic's application was ultimately rejected after he disclosed his Jewish faith during the franchise vetting process.
After being denied the opportunity to franchise, Domanic filed a lawsuit in federal district court in Texas, claiming that Christian Brothers' actions constituted racial discrimination. He argued that discrimination against Jews should be considered racial discrimination under federal law, regardless of the company's stated religious motivations. The district court initially allowed Domanic to proceed with his claim but later granted summary judgment in favor of Christian Brothers, concluding that the company's franchise policy was based on religious, not racial, grounds.
The Ruling
The Fifth Circuit Court, led by Judge Stuart Kyle Duncan, reviewed the case and affirmed the district court's ruling. The court stated, "We decline to adopt this novel argument, which is in tension with the Supreme Court’s longstanding precedent that § 1981 does not reach religious discrimination." The court emphasized that Domanic's claim did not provide evidence that the company's policy was a pretext for ethnic discrimination.
The ruling clarified that while § 1981 protects against racial discrimination, it does not extend to claims based solely on religious discrimination. The court noted that Domanic failed to demonstrate that Christian Brothers' franchise policy was a cover for discrimination against Jews based on ethnicity. The judges concluded that the evidence showed that Christian Brothers has franchised to individuals of various ethnic backgrounds, including ethnic Jews who are also Christians.
Impact
This ruling has significant implications for both franchise agreements and discrimination claims. It reinforces the legal understanding that religious discrimination is not covered under § 1981, which specifically addresses racial discrimination. This decision may discourage similar claims from individuals who believe they have been discriminated against in business contexts where religious affiliation is a factor.
Furthermore, the ruling could set a precedent for other faith-based organizations that operate under similar franchise models. It clarifies that companies can maintain religious-based policies without violating federal discrimination laws, as long as they do not engage in racial discrimination based on ancestry or ethnicity.
What's Next
As of now, there are no indications that Domanic plans to appeal the ruling to the Supreme Court. However, the legal landscape surrounding discrimination claims in religious contexts may continue to evolve, especially as more cases arise that challenge the boundaries of religious and racial discrimination under federal law.