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While the US Supreme Court’s June 27 decision striking down race-conscious admissions programs at Harvard and the University of North Carolina does not directly apply to private employers, the decision will reverberate and impact corporate ID&E programs as a practical matter.

The Decision Ends Systematic Consideration of Race in the Admissions Process

Striking down the affirmative action programs at Harvard and UNC, the Court ruled that both programs violate the Equal Protection Clause of the Fourteenth Amendment. In so doing, the Court effectively overturned the 2003 ruling in Grutter v. Bollinger, in which it said race could be considered as a factor in the admissions process because universities had a compelling interest in maintaining diverse campuses.

In his concurring opinion, Justice Clarence Thomas called the programs “rudderless, race-based preferences designed to ensure a particular racial mix in the entering classes.” Both policies “fly in the face of our colorblind Constitution and our nation’s equality ideal,” he added.

In a dissenting opinion, Justice Ketanji Brown Jackson, the Court’s first Black female justice, said: “With let-them-eat-cake obliviousness, today, the majority pulls the ripcord and announces ‘colorblindness for all’ by legal fiat. But deeming race irrelevant in law does not make it so in life.”

The EEOC Tries to Reign in the Impact of the Decision

On the same day that the Court issued its decision, the federal U.S. Equal Employment Opportunity Commission issued a statement distinguishing diversity efforts in some colleges and universities and employer efforts to foster diverse and inclusive workforces:

Today’s Supreme Court decision effectively turns away from decades of precedent and will undoubtedly hamper the efforts of some colleges and universities to ensure diverse student bodies. That’s a problem for our economy because businesses often rely on colleges and universities to provide a diverse pipeline of talent for recruitment and hiring. Diversity helps companies attract top talent, sparks innovation, improves employee satisfaction, and enables companies to better serve their customers.

However, the decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions, Inc. v. University of North Carolina does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.

Notwithstanding the EEOC’s position regarding corporate ID&E programs, we anticipate a significant uptick in challenges to employers’ ID&E programs based on arguments that they either directly or through their implementation take protected characteristics into account. 

A Wave of Litigation Challenging US Companies ID&E Initiatives

In our earlier blog, we discussed some of the backlash we’re observing in response to corporate ID&E programs. From state legislation restricting the content of diversity-related training (e.g. in Florida) to increased activity from conservative advocacy groups filing lawsuits, requesting agency investigations and pursuing other complaints, the counterattacks to corporate ID&E programs have been brewing for some time. But now, the Supreme Court’s decision will act as fuel to the fire, accelerating the trend of reverse-discrimination claims.

The Supreme Court’s decision does not alter the existing legal landscape that governs ID&E programs in the workplace. As was true before, in most contexts, protected characteristics may not be taken into account, even as a plus factor, when making employment decisions. An employer’s consideration of the race (or other protected characteristics) of its employees, contractors, or applicants was already subject to close scrutiny under Title VII and Section 1981.

However, the Court’s ruling will likely increase the risk to ID&E programs by encouraging legal challenges that could find certain programs to cross the legal line either in their design or implementation. We predict that conservative public-interest groups will bring more reverse race-discrimination claims against employers. High profile companies with well-publicized ID&E programs will likely be among the first targets. America First Legal, a group led by Stephen Miller (a former aide to Donald Trump), has already filed complaints with the Equal Employment Opportunity Commission alleging discriminatory race-based hiring practices at companies including several large investment companies and retailers and will likely pursue even more of these cases following the Court’s decision. And, in conservative states, government authorities such as state attorneys general might also increase enforcement efforts.  We also expect an active plaintiffs bar bringing these claims directly on behalf of employees who believe they were negatively impacted by an ID&E program and possibly on behalf of a class of such employees. 

Guidance for Companies Doubling-Down on ID&E Initiatives

For companies with robust ID&E programs (or those intending to implement the same), we recommend several precautions:

  1. Partner with counsel to undertake a full-scale and holistic ID&E assessment to audit program criteria and communications under legal privilege.
  2. Train the C-Suite, diversity professionals and your comms team on the importance of communicating thoughtfully on the topic of ID&E. Be clear about Dos and Don’ts.
  3. Conduct refresh training for all recruiters and hiring managers to ensure employment decisions are made on the basis of business-related criteria.
  4. Adopt lessons from the Supreme Court decision by designing policies and practices that are race neutral but nonetheless likely to promote diversity.
  5. Clearly delineate that ID&E programs are not there to make employment decisions based on demographics. A commitment to inclusion and diversity is a business imperative, particularly in an increasingly global consumer market.