I'm a sales representative with a company that provides office catering services. We provide water, soft drinks and juices, fresh produce, and snacks to our client businesses, for their employees and their customers. We have a wide geographical range and serve a variety of businesses.
I've noticed that the company seems to assign sales territories to representatives that share the same race with the clients. In other words, African Americans tend to be assigned to areas where more of the businesses are owned by African Americans, Chinese Americans serve customers in Chinatown, and Latino representatives tend to get regions that are more heavily Latino. I can see why the company might feel like this is a good business model, but is it legal?
No, it isn't legal. The practice of making assignments based on race is called "steering," and it violates Title VII.
As you point out, some employers who steer employees to particular jobs have what might seem to be a benign motive. Your employer likely believes that customers will be more comfortable doing business with an employee who shares their race and perhaps ethnicity. The employer may also believe that an employee of the same race could have certain advantages in serving these clients, such as perhaps a shared language other than English, better knowledge of the neighborhood, and so on. The employer's purpose may not be to treat employees differently because of their race, but simply to make money.
None of this matters, however. Even if your employer's intentions are not to mistreat employees, it is still making decisions based on race. The employer is making assumptions based on stereotypes -- that all people of the same race share other characteristics as well, that people would rather do business with someone of the same race, and that people might tend to mistrust someone of a different race, for example. Whether or not these assumptions sometimes bear out, they are harmful. If your employer is refusing to assign African American employees to serve predominantly white sales territories, because it believes white customers would prefer to do business with someone of the same race, you can begin to see why this isn't as benign as it may seem.
Some employers have argued that they should be able to honor customer preference for employees of a certain race, gender, and so on. The argument is that the employer in this situation isn't discriminating, it is simply following the time-honored business maxim that the customer is always right. However, this is not a successful legal defense to a discrimination claim. By allowing customer bias to dictate the company's decisions, the company has been complicit in discriminating. If a company uses race as a basis for decision making, even if it is trying to meet customer demand, that's illegal.
In your company, job assignments are based, at least in part, on race. This not only perpetuates harmful stereotypes, but it also cuts off job opportunities for employees. What if the most prestigious and highest paid regions are all Latino, Korean American, or white? That would mean employees who don't share the same race as the best customers don't get the chance to serve those customers, to make more money for themselves and the company, or to prove that they can be the top salespeople. In short, it means that there isn't a level playing field for employees of all races at your company, which is exactly what laws prohibiting discrimination are intended to stop.