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Law Practice Today

February 2024

Defending Diversity in Corporate America

Paul-Winston Cange


  • The Supreme Court decision in Students for Fair Admissions has emboldened conservative activists to undermine corporate DEI initiatives.
  • While the Fair Admissions decision did curb affirmative action in academia, it did not broadly apply to corporate DEI efforts.
  • There are important considerations in designing corporate DEI programs that can withstand legal scrutiny. 
Defending Diversity in Corporate America Media

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The Supreme Court’s decision in Students for Fair Admissions, Inc. v. Presidents and Fellows of Harvard College (600 U.S. 181 (2023)) not only outlawed the dominant form of affirmative action in American academia, but it also marked a turning point in diversity, equity, and inclusion (DEI) programs in corporate America. Following the murder of George Floyd and the social movement that it sparked, corporations redoubled their efforts to increase workplace diversity, equity, and inclusion. DEI consultants were hired at record numbers as companies looked for the most effective way to commit themselves to diversity. However, since last summer, there has been a stark decline in corporate efforts to increase diversity in the ranks, and legal challenges to their viability have only increased.

This decline has not happened in a vacuum. The Supreme Court’s decision has motivated scores of conservative politicians and activists to pressure companies into retreating from their DEI priorities. As early as July 2023, just one month after the Fair Admissions decision, 13 Republican Attorneys General sent a letter to the CEOs of all Fortune 100 companies. In the letter, the Attorney General summarized the Fair Admissions decision with a single quotation, “Eliminating racial discrimination means eliminating all of it.” While that statement wrenched out of context, is innocuous enough, its true perniciousness is underscored by the letter’s description of what racial discrimination means. The letter highlighted corporate programs to increase diversity as instances of illegal racial discrimination. There was no mention of the historical and systemic inequities that have resulted in white and male-dominated workplaces throughout much of corporate America. The letter also threatened legal action against corporations that maintain diversity programs and initiatives. 

Activists and politicians also rely on public pressure campaigns to force corporations and institutions to retreat from their diversity goals. Florida Governor Ron DeSantis burnished his reputation with the conservative base by attacking what he called “corporate wokeness.” In DeSantis’s second electoral address, he stated that “Florida is where woke goes to die.” Elon Musk, one of the wealthiest people in the world and the owner of X and CEO of Tesla, and SpaceX, recently attacked DEI programs, calling them “another word for racism.” Recently, these activists may have scored their biggest victory in their effort to cow American institutions into submission—the resignation of Harvard President Claudine Gay. Dr. Gay was the first black President of Harvard and a first-generation Haitian American. This personal attack against Dr. Gay represented a shift in assaults on diversity in general. Rather than just challenging DEI programs as illegal, conservatives are now attacking successful Black professionals as undeserving beneficiaries of reverse racism. This has long been a trope in the conservative movement, but now it is ratcheted up as part of the barrage against diversity initiatives.

The odiousness of these attacks cannot be exaggerated. They are attempts to erase American history and foreclose even the notion of progress. And they actually go against corporate interests. For example, Mark Cuban has repeatedly spoken out in favor of DEI and its benefits to the organizations that he leads (see, e.g., 3 Reasons Why Mark Cuban Is Right About DEI) Cuban recently stated: “Good businesses look where others don't, to find the employees that will put your business in the best possible position to succeed. By extending our hiring search to include them, we can find people that are more qualified. The loss of DEI-Phobic companies is my gain.”

Corporations should not cower in the face of these attacks. While the Fair Admissions decision did curtail affirmative action in academia, it mandated no restrictions on diversity programs in corporate America.

In reality, such threats are empty bluster and political posturing. Corporations that give in would be caving to a phantom. Even if Fair Admissions had some extension to workplace diversity efforts, there is no reason for companies to abandon such initiatives entirely. It is not especially difficult to craft corporate DEI programs that would pass muster. Here we set forth a few suggestions and pointers on how to do so.

First, it is important to remember that race-based discrimination in employment has long been illegal under Title VII of the Civil Rights Act of 1964. Accordingly, all corporate diversity programs already had to abide by nondiscrimination law. Plaintiffs bringing suits against corporations for their diversity programs will have to meet the high bar of proving that the program created an adverse effect on their employment and harmed their careers. Within these broad guidelines, there is still ample space for corporations to construct diversity programs. Second, it is critical to avoid designing programs that are explicitly geared toward a certain racial identity. Even if the program may not be a quota, a program that favors one racial identity over all others will certainly be subject to a high level of legal scrutiny.

Third, one of the obvious things a company can do within the confines of the law is to promote educational programs around diversity. These programs can ensure that employees, particularly those in leadership positions, act to remove institutional and personal bias from the company. Fourth, companies can also create race-neutral programs that are designed to recruit and retain employees from disadvantaged backgrounds. Programs designed for first-generation college students, for example, often disproportionately benefit people from underrepresented identities. Importantly, programs explicitly based on increasing racial diversity have not been outlawed.

Fifth, the Fair Admissions case does not touch corporate employment programs. Lastly, several states such as California have already outlawed affirmative action in education and private hiring; that has never been construed to restrict corporate diversity programs.

All that being said, there are two cases in which conservative legal activists are attempting to expand the holding of Fair Admissions into corporate diversity practices. Currently, Do No Harm, a group that bills itself as attempting to eradicate discrimination in healthcare, is advancing a lawsuit against Pfizer with the goal of outlawing corporate diversity recruiting programs. Although their original case, Do No Harm v. Pfizer, was dismissed at the district court, they are now appealing that decision in the Second Circuit. Similarly, the disingenuously named American Alliance for Equal Rights, the same organization that litigated the Fair Admissions case, has sued a venture capital firm for a grant it initiated whose explicit goal was to increase funding to small businesses owned by women of color. The American Alliance alleges that the firm, called the Fearless Fund, is in violation of the Civil Rights Act of 1866, because their program is a discriminatory contract. The Eleventh Circuit placed a temporary injunction on the program, and the case now awaits a decision from a larger panel.

The goal of these efforts is to severely curtail the ability of corporations to increase diversity. They represent a real threat to the goal of building a representative economy. It is important for civil rights lawyers, business leaders, and even big law firms to band together to fight back against these insidious efforts to erect more barriers to equality. In reaction to the Fearless Fund case, a coalition of civil rights organizations along with Crowell & Moring LLP filed an amicus brief arguing that the intent of the Civil Rights Act of 1866 was to provide access to the market for formerly enslaved Black people who had been excluded from the free market. The brief argues that to use the statute to prohibit programs that help people of color is an untenable perversion of the statute itself. Attorneys dedicated to civil rights will have to continue making these important contextual arguments to defend critical remedial programs. The future of diversity efforts in American corporations is dependent on it.