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Supreme Court Affirmative Action Decision May Impact US Companies’ DEI Initiatives

How will the landmark decision to not include race in university applications affect the DEI of US companies?

Fri Jan 5 2024

The recent US Supreme Court decision to make race-based college admissions illegal will likely have a knock on effect on employers' Diversity, Equity, and Inclusion (DEI) initiatives. 

While the decision applied to higher education institutions, rather than businesses, the additional scrutiny means employers will likely have to question whether all DEI initiatives are legitimate under Title VII—a key part of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, and national origin.

Title VII says that it is illegal for employers to consider the race of any candidate or employee—even with the intention of creating a more diverse, equitable, or inclusive workforce—in any employment decision. 

Here's how the supreme court decision could impact employment moving forward. 

The supreme court decision explained

In Students for Fair Admissions (SFA) vs President and Fellows of Harvard College, the US Supreme Court decided to end affirmative action in college admissions. It held that using race as a plus factor in admissions decisions violates the Equal Protection Clause of the 14th Amendment.

The case was brought against Harvard and UNC by the advocacy group SFA, who argued affirmative action policies were preferential to Black and Latino students. 

The Supreme Court’s decision on affirmative action in college admissions was based on an assessment of Title VII of the Civil Rights Act. 

The impact on US employers 

Despite not directly applying to US employers, there have been calls for businesses to evaluate their DEI policies.  

Only a few weeks after the decision, 13 Republican state attorneys general sent a letter to the CEOs of Fortune 100 companies to remind them of their “obligations as an employer under federal and state law to refrain from discriminating on the basis of race, whether under the label of ‘diversity, equity, and inclusion’ or otherwise.”

In response, 21 Democratic attorneys general co-sent their own letter asserting that the Supreme Court decision had no bearing on the legality of company DEI initiatives.

The letter also encouraged employers to continue examining their recruiting, retention, and professional development practices to remove unnecessary barriers to diversity. 

Assessing the impact of the ruling on DEI Initiatives

While it's illegal for employers to consider the race of any candidate or employee, DEI initiatives can be used to foster a more inclusive workplace, and they have shown to reduce the risk of employment discrimination and hostile work environment claims.

To comply with Title VII of the Civil Rights Act employers cannot use hiring quotas, reserve positions for certain groups, or use an individual’s race as a tiebreaker in employment decisions, even as part of their DEI initiatives. 

Instead, initiatives may take the form of training and education programs, expanding the applicant pool to include underrepresented individuals, or mentorship and scholarship programs. 

However, even these measures are under fire. 

Several lawsuits have been filed alleging reverse discrimination. Stephen Miller, a senior White House adviser in the Trump administration, and his conservative advocacy organization America First Legal recently took the position that all DEI programs are illegal

Conservative activist Edward Blum’s organization, the American Alliance for Equal Rights, also took legal action or threatened top law firms and other organizations, accusing them of excluding White and Asian students from fellowship programs based on race.

Despite these challenges, it is still lawful for employers to develop programs and policies aimed at providing equal opportunities. 

Employers are likely to be more tentative, however, in the strength of these initiatives.