Diversity, equity, and inclusion (DEI) efforts in employment are currently under attack. Since June 29, 2023, when the United States Supreme Court struck down affirmative action efforts in college admissions, there has been a steady stream of reports in the press on challenges to DEI practices in employment, with headlines such as “Corporate Diversity Efforts Become Next DEI Target” and “Conservatives are Suing Law Firms for Diversity Efforts.”
Employers should not be scared off by these headlines. DEI initiatives in employment, if constructed appropriately, should survive legal challenges.
The Supreme Court’s Ruling
In Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, the Supreme Court ruled that race-based admission systems violate Title VI of the Civil Rights Act of 1964 and the 14th Amendment to the Constitution. The Supreme Court faulted Harvard College and the University of North Carolina for considering students’ races in determining whether to offer admission. The Court held that the schools’ asserted interests in the educational benefits of diversity were not sufficiently measurable, and that the policies disadvantaged some racial groups. In addition, the Court criticized the programs because they lacked a “logical end point” that would guide courts in determining when diversity goals had been achieved.
The Subsequent Challenges to Employment Practices
In the wake of this Supreme Court decision, opponents of affirmative action have taken aim at employers’ DEI initiatives. For example, in August 2023, an organization known as American Alliance for Equal Rights (AAFER) sued two large international law firms, alleging that their fellowship programs – which supported minorities, students with disabilities, and students in the LGBTQ community – were unlawful because they were “racially exclusive.” Since the commencement of the lawsuits, both firms have reportedly altered their programs to take a race-neutral approach. Although the cases against these two law firms have been dismissed, AAFER has sent letters to three additional law firms demanding changes to their fellowship requirements.
What This Means for DEI Initiatives in Employment
Employers are understandably concerned about the implications of these legal developments for the workplace, and especially for employers’ efforts to increase diversity and inclusion. While the decision unquestionably has major implications for college and university admissions, by and large the law of the workplace has not changed. As evidenced by cases filed in recent months, some employer programs will need to be modified to avoid legal challenge, but most of the common employer practices to increase diversity and inclusion have been, and remain, legally sound and defensible.
As a starting point, it is important to note that numerous federal and state anti-discrimination laws have always forbidden employers from “discriminating” against or for individuals on account of race, color, sex, religion, and national origin and other protected characteristics. Under these anti-discrimination laws, employers are not (and have not been) allowed to “put their thumb on the scale” for race. That means employers may not favor one individual over another on account of either individual’s race, even if the employer believes it is for a socially desirable purpose.
This is true even in the context of affirmative action programs. Employers may take affirmative action to expand the pool of applicants and to identify barriers to hiring – they may not, however, make individual hiring decisions based on protected class status. Accordingly, for employers who have followed the legal requirements, the Supreme Court’s ruling should have no effect. The ruling does not invalidate, nor should it deter, employers’ attempts to diversify their workforces through means that have always been and remain legally permissible.
With this as background, what is an employer to do to maintain or create legally compliant DEI initiatives?
Employer sponsorship and mentorship programs that are intended to target members of a protected class pose a foreseeable risk to employers and should eliminate any criteria that expresses a preference based on protected class. Employers with hiring and benchmark goals should make sure that these are not quotas, which are illegal, and also that hiring decisions are based on qualifications and not protected characteristics. Without these guardrails, employers are at risk for reverse discrimination claims, where a white applicant or employee alleges that a minority applicant or employee received an unfair advantage.
Many employers have come to realize that their overall success is tied to the strength and diversity of their workforce. Although the anti-affirmative action forces have created challenges for employers, the Supreme Court’s decision should not deter employers from continuing their efforts to promote a more inclusive environment. However, employers will need to become more vigilant in designing their policies to steer clear of potential liability while still promoting a more inclusive environment.
For questions about how your business may be impacted by these recent developments, please reach out to Kenneth Prince (kprince@princelobel.com), Daniel S. Tarlow (dtarlow@princelobel.com), Laurie F. Rubin (lrubin@princelobel.com), or other members of Prince Lobel’s Employment Law Practice Group.