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December 12, 2023 Best of ABA Sections

Impact of SCOTUS Affirmative Action Ruling on Employers

Esther G. Lander and Amanda S. McGinn

In Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, No. 20-1199 (U.S. June 29, 2023) (the “Harvard Opinion”), the U.S. Supreme Court overturned its past precedent and held that the goal of achieving a diverse student body cannot justify using race as a “plus factor” in college admissions and that doing so violates the Equal Protection Clause of the Fourteenth Amendment and Title VI of the Civil Rights Act.

The Impact of the Court’s Opinion on Employers

The Court’s Harvard Opinion does not directly apply to private employers. This is because the Equal Protection Clause applies only to federal and state actors, and the protections from discrimination under Title VI apply only to recipients of federal funding. Moreover, unlike in higher education, in the employment context, affirmative action that involves racial or gender preferences to achieve diversity has never been permissible. Rather, under Title VII, race- or gender-conscious affirmative action by private employers is generally unlawful in the absence of a remedial purpose. Thus, although the Harvard Opinion does not change the landscape for private employers, where the use of affirmative action is already extremely limited, employers should anticipate increased scrutiny and challenges to their workplace affirmative action plans and diversity initiatives. Employers should, therefore, review their practices to ensure they are being carried out in a manner that is not vulnerable to attack under Title VII and the Supreme Court’s rulings.

Impact on Workplace Affirmative Action

The Supreme Court has previously held that Title VII does not prohibit race- or sex-based affirmative action plans in the workplace so long as the plans meet specific criteria. In particular, an affirmative action plan must be justified by a “manifest imbalance” reflecting an underrepresentation of minorities or women in “traditionally segregated job categories,” and any race- or gender-based preference in the plan must be properly tailored to cure the disparity without unnecessarily trammeling the interests of non-minorities or males.

Consistent with these opinions, the Equal Employment Opportunity Commission implemented regulations under Title VII that place similar restrictions on affirmative action. In order for employers to engage in race- or gender-conscious employment decisions, they must (1) have a written plan; (2) engage in reasonable self-analysis of the relevant employment practice (e.g., hiring or promotion); (3) have a reasonable basis to conclude from the self-analysis that the relevant employment practice has had an adverse effect on “previously excluded groups” or groups whose opportunities have been “artificially limited”; (4) include reasonable action in the plan that is narrowly tailored to solve the problem identified without placing unnecessary restrictions on the workforce as a whole; and (5) maintain the plan no longer than necessary to achieve the plan’s objective. Employers who wish to develop written affirmative action plans should, therefore, ensure that their plans are remedial, narrowly tailored to cure documented and identified statistical imbalances in specific jobs, temporary, and do not unduly harm non-beneficiaries of the preference.

Impact on Workplace Diversity Initiatives

Many workplace diversity initiatives include transparent goals and employment programs that take race, gender, and ethnicity into account. When implementing and updating diversity initiatives and programs, there are several important takeaways from the Harvard Opinion that employers should consider. Race or gender should not be used as a plus factor to improve workplace diversity. As noted above, under Title VII, race or gender can only be used as a plus factor when an employer has a written affirmative action plan that meets the above criteria. Race or sex should not be a factor when deciding who advances at any stage of the selection process. Beyond sourcing and recruiting to ensure a diverse pool, diversity initiatives should not consider race or ethnicity at any point in the selection process. For example, diverse slate requirements should be implemented in a manner where a candidate’s gender, race, or ethnicity is not being used to decide whose résumé moves forward or who advances to the interview stage if doing so is at the expense of advancing a majority group candidate who would have made the cut absent the diversity requirement. Representation goals based on EEO-1 categories should be reconsidered. The Supreme Court correctly pointed out that the six EEO-1 race and ethnicity categories are both over-inclusive (e.g., by grouping all Asians as one category) and underinclusive (e.g., no category for individuals of Middle Eastern descent) if they are being used to measure true diversity of thoughts, ideas, and perspectives. These concerns may draw into question the weight companies are placing on EEO-1 diversity metrics gains or losses. Finally, diversity initiatives should not be a zero-sum game. Lawful diversity initiatives should be designed to expand opportunity for underrepresented groups without also negatively impacting opportunities for those in the majority. Diversity initiatives that are a pathway to permanent employment or advancement initiatives that provide a leg up on promotion should not be open only to minorities or women because these initiatives could be recast as, ultimately, negatively impacting opportunities for the majority group. Thus, employers should establish carefully the criteria for diversity-based hiring and advancement programs and focus on a potential participant’s life experiences, which can include how diverse characteristics of any kind have affected their lives, “be it through discrimination, inspiration, or otherwise.” Employers might also consider documenting the reasons for their final selections so that it is clear the decisions were made for reasons other than the “inherent benefit in race qua race—in race for race’s sake,” which the Harvard Opinion describes as impermissible stereotyping.

ABA Labor and Employment Law Section

This article is an abridged and edited version of one that originally appeared on page 1 of Labor and Employment Law, Summer 2023 (51:2).

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Esther G. Lander is a partner with Akin in Washington, D.C. Her practice focuses on complex employment litigation, internal and government investigations, and client counseling regarding allegations of discrimination, harassment, and other employee misconduct; pattern or practice, class, and collective actions; disparate impact discrimination involving selection procedures and testing validation; and diversity and inclusion initiatives and pay equity.

Amanda S. McGinn is a counsel with Akin in Washington, D.C. Her practice focuses on complex employment litigation, arbitrations, internal and government investigations, and client counseling involving allegations of discrimination, harassment, and other employee misconduct; affirmative action requirements for government contractors; and high-stakes contract and labor disputes.