With the U.S. Supreme Court seemingly poised to end affirmative action for college admission programs, many U.S. employers are wondering whether or to what extent they can continue their diversity, equity, and inclusion (DEI) and affirmative action programs. Although a Court decision ending or limiting the use of affirmative action for university admissions will not likely have direct application to workplace DEI and affirmative action programs, companies may be indirectly impacted by the decision, including through potential legal challenges to their programs. Employers are also increasingly having to navigate the growing trend of state legislation and measures seeking to limit workplace DEI efforts. In light of these trends and the anticipated Court decision, employers should:
- anticipate increased challenges to their DEI and affirmative action programs;
- monitor state legislation and regulation aimed at restricting workplace DEI training, policies, and practices; and
- review their existing DEI and affirmative action programs to determine if they might be vulnerable to attack.
Background on the College Admissions Affirmative Action Cases
Under current Court precedent, educational institutions can lawfully consider race as a factor in their admission processes in order to increase diversity in their student populations. This practice is commonly referred to as “affirmative action” in college admissions.
The two cases pending before the Court were originally brought in 2014 by the Students for Fair Admissions, Inc. (SFFA), challenging Harvard University’s (Harvard’s) and the University of North Carolina’s (UNC’s) use of race as a factor in their admission programs. SFFA specifically claims that Harvard’s and UNC’s admission policies violate Title VI of the Civil Rights Act of 1964 (Title VI) and the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution by, among other things, unlawfully using race to give a preference to underrepresented minority applicants.
In January 2022, the Court agreed to hear SFFA’s cases against UNC and Harvard. In these cases, SFFA is seeking to have the Court overrule its long-standing precedent in Grutter v. Bollinger, 539 U.S. 306 (2003) and other cases permitting the use of race as a factor in college admissions.
The Court Is Expected to End Affirmative Action in College Admissions
During the nearly five hours of oral argument on October 31, 2022, the Court explored numerous issues and hypotheticals. Below are a few of the more notable takeaways from the oral argument:
- The 25-Year Sunset on Affirmative Action: One of the more significant topics at oral argument was whether affirmative action would even be necessary for colleges after the 25-year horizon outlined in Grutter expires. In Grutter, the Court majority held that race‑conscious admissions policies would no longer be necessary for colleges and universities “in 25 years” to achieve diversity in their student bodies and would then be rendered unconstitutional. During oral argument, the Justices sparred over whether universities could use race-conscious admission programs after the 25-year timeline sunsets in 2028 or whether that timeline was a mere projection of when the Grutter Court thought race‑conscious admissions would no longer be needed for colleges to achieve diversity. Justices Roberts, Kavanaugh, and Barrett, the most likely swing votes on the Court for these cases, focused much of their attention on this timeline and the seeming inability of the lawyers for Harvard and UNC to articulate an exact timeframe for when race-conscious admission programs would achieve the diversity necessary for colleges to end such preferences.
- Some Justices Questioned the Value of Racial Diversity: Justices Thomas and Alito expressed doubt about the need for diversity on campus as a cognizable interest—let alone a compelling one. Chief Justice Roberts and Justice Gorsuch raised concerns that continuing to use race in college admissions under the guise of diversity could be a subterfuge for racial quotas that has a negative impact on Asian applicants and could be similar to the holistic approach used in the 1920s that imposed quotas on Jewish applicants.
- Workplace DEI Programs Rarely Mentioned: The role of race in the workplace diversity policies was discussed only on a few occasions during oral argument. Some Justices, including Justices Kagan and Sotomayor, appeared to support the benefits of diversity in the workplace and more broadly, while other Justices, such as Justice Thomas, appeared to disagree.
Given the current composition of the Court, statements at oral arguments, and recent decisions by this Court, the Court is expected to strike down the use of race as a factor in admissions programs for colleges and universities.
Potential Impact on Workplace DEI and Affirmative Action Programs
If the Court strikes down affirmative action for college admissions, the decision is not likely to have direct application to workplace DEI or affirmative action programs and initiatives. Rulings relating to Title VI and the U.S. Constitution in the educational context do not necessarily affect workplace-related policies. Instead, employer DEI and affirmative action programs are governed by Title VII and other federal and state employment anti-discrimination laws. Under most employment discrimination laws, using protected classes, such as race, to make employment decisions is generally unlawful.
Although the Court’s ruling may not directly affect the workplace, the Court’s decision could encourage challenges to workplace DEI and affirmative action programs. Depending on the Court’s reasoning, the importance of diversity as a compelling interest more broadly could be impacted and might indirectly undercut some of the rationales used to support DEI initiatives and affirmative action measures in the workplace. As a result, employers should understand the differences between permissible and potentially unlawful DEI and affirmative action programs.
- DEI Programs: DEI programs are not the same as affirmative action. DEI in the employment context generally relates to companies having policies and practices geared towards ensuring equal opportunities and outreach to certain underrepresented groups in the workforce, such as women, people of color, LGBTQ+ individuals, and people with disabilities. DEI policies might include outreach to diversity-focused recruitment sources to find a strong pipeline of diverse talent, creating training and mentoring programs aimed at supporting diverse talent within a company, and having other policies and practices to champion and promote diversity within the workforce, such affinity groups. Significantly, DEI does not involve using protected categories, such as race, to make employment decisions or creating set asides or hiring quotas based on a protected class.
- Federal Contractor Affirmative Action Plans: The Court’s decision is not expected to have any direct impact on the affirmative action requirements that apply to federal contractors because those programs do not raise the same race-conscious concerns that the Court is considering in the university context. Under Executive Order 11246 and other affirmative action laws that apply to federal contractors, covered companies are legally required to create affirmative action plans annually. These affirmative action plans generally require performing various data analyses of workforce demographics. If contractors find that females, minorities, individuals with disabilities, and protected veterans are underrepresented based on those analyses, they must set placement goals to increase representation of those groups. Affirmative action under these laws, however, expressly prohibits using protected categories, such as race or gender, as a factor in making employment decisions or having any quotas or set asides based on race, gender, or other protected characteristics. Instead, these laws require contractors to focus on increasing representation of certain underrepresented groups through various outreach and DEI efforts, including undertaking recruitment practices aimed at creating diverse candidate pools, which, over time and through application of a neutral selection process, should lead to progress on placement goals.
- Voluntary Affirmative Action Programs: Absent legal requirements to create affirmative action plans, employers can, in certain limited instances, create voluntary affirmative action plans, allowing the employer to engage in certain preferential treatment based on a protected class. Employers, however, must have a sufficient justification and meet certain criteria to ensure these plans are permissible under anti-discrimination laws. Under Court precedent, a voluntary affirmative action plan is generally permissible only if: (1) it is designed to eliminate a manifest imbalance in traditionally segregated job categories (i.e., it is remedial); (2) it does not unnecessarily trammel the interests of non‑diverse candidates; and (3) it is a temporary measure intended to attain, not maintain, a balanced workforce. The EEOC also has long-standing guidance on voluntary affirmative action programs, which identifies three limited circumstances where voluntary affirmative action programs can be used by employers: (1) where an analysis reveals that existing or contemplated employment practices are likely to cause an actual or potential adverse impact; (2) where a comparison between the employer’s workforce and the appropriate labor pool reveals that diversity efforts are necessary to correct the effects of prior discriminatory practices; and (3) where a limited labor pool of qualified people of color and women exists due to historical restrictions by employers, labor organizations, or others. Because employers typically do not conduct the analyses required to determine whether there are any workplace diversity imbalances, many employers do not meet the criteria necessary to have voluntary affirmative action programs.
State Legislation Creates Risk for Workforce Diversity Programs
Companies are increasingly having to navigate the growing trend of lawmakers passing and considering various legislation and measures aimed at limiting certain DEI policies, trainings, and practices. Although much of the state legislation and measures relating to DEI efforts only apply to educational institutions and universities, a few states have taken measures targeted at employers outside the educational context.
- Florida: In 2022, Florida Governor Ron DeSantis signed into law the Stop W.O.K.E Act (“SWA”). The SWA, among other things, prohibited employers in Florida from requiring Florida-based workers to attend certain types of DEI trainings, if such trainings could espouse, promote, advance, or compel specified diversity concepts, such as critical race theory. In August 2022, a federal judge in Florida temporarily blocked the SWA provisions relating to workplace DEI efforts on grounds that those provisions violated the First Amendment, which was upheld by the U.S. Eleventh Circuit Court of Appeals on March 16, 2023. In the meantime, Florida continues to challenge employer DEI policies this legislative session, including introducing the “Reverse Woke Act,” which aims to discourage employers from offering insurance to cover gender-affirming care by making employers responsible for the lifetime costs (even if not employed) for an employee’s detransition care.
- Texas: In February 2023, Texas Governor Abbott issued a memorandum to state agencies warning them not to use any DEI programs in hiring that are “inconsistent” with Texas law, including setting diversity goals or interview targets for diverse candidates. The memorandum provides that hiring cannot be based on anything “other than merit.” Although the memorandum is aimed at Texas public employers, it is unclear whether the guidance in this memorandum could also apply to private companies that contract with Texas or whether the Texas Governor may take similar action towards private employers in the state.
- Kansas: Kansas lawmakers recently passed a budget amendment to Kansas’ Behavioral Sciences Regulatory Board, which oversees licensing for various professionals in the state, including psychologists, social workers, addiction specialists, and family therapists. The amendment seeks to prohibit using that Board’s budget to require “licensees or permit holders to go through training or education on ‘diversity, equity, inclusion, . . . or other related topics.’”
Perhaps in response to legislation and other social movements seeking to limit DEI in the workplace, companies are also seeing an uptick in the number of cases challenging diversity programs. Although these suits have largely been unsuccessful, employers should be cautious in creating and executing their DEI efforts to avoid inadvertently treading into practices that could be found to be unlawful. In October 2021, for instance, a jury in a North Carolina federal court awarded a former white Senior VP $10 million in damages based on its finding that the employee was terminated due to his employer’s “intentional campaign to promote diversity in its management ranks.” The evidence presented to the jury, among other things, showed that, shortly after the company formed a special counsel in 2018 to address its failure to meet leadership diversity targets, white men were discharged and women and people of color were promoted in near uniformity.
Although reverse discrimination cases challenging workplace diversity programs is not new, the potential risks of these types of claims may be heightened by the current trend of laws limiting DEI programs and the Court potentially ending affirmative action in college admissions.
Practical Steps to Mitigate Risk for Workplace Diversity Programs
In anticipation of the Court overturning affirmative action for college admissions and considering the increasing trend of state laws seeking to limit DEI programs and reverse discrimination litigation, employers should consider reviewing their DEI and affirmative action efforts closely and consider measures to mitigate potential risk.
- Review DEI Programs for Vulnerabilities: Companies should review existing DEI efforts with an eye towards areas of vulnerability. Employers might consider their DEI policies, internship programs, employee resource groups, and other diversity efforts to ensure they do not create unlawful preferences based on protected characteristics or include quotas or set asides. Hires and promotions should be based on business-related criteria and merit. If employers intend to increase diversity by using preferences based on protected characteristics, employers should tread carefully to ensure those programs comply with Court precedent and EEOC guidance for establishing lawful voluntary affirmative action programs. Employers should also review their policies, procedures, and promotional materials about their DEI programs for any statements that describe the companies’ practices in a manner that could viewed as unlawful. In some cases, plaintiffs have used statements in DEI policies and literature to support reverse discrimination claims.
- Justify Efforts for DEI Programs: In anticipation of the Court ruling against affirmative action, employers should be prepared to justify the importance of their existing DEI programs and how those programs are consistent with the law. Such justifications could include tangible evidence to demonstrate how increased diversity can improve the company’s bottom line through increased collaboration and better decision-making.
- Train Managers on Not Using Race or Preferences in Employment Decisions: Employers should consider conducting manager and employee training, emphasizing that the company’s anti-discrimination policies are aimed at ensuring fair and lawful employment decisions, regardless of race, ethnicity, gender, and other protected characteristics. The training should explain that recruiting for diversity is legitimate, but that selection should be based on the most qualified candidate (regardless of their demographics), and not take protected characteristics into account.
- Review Diversity Trainings for Risk: Review current diversity trainings, including unconscious bias training, in light of recent legislation aimed at limiting DEI programs and trainings that might make it vulnerable to attack. Employers might be able to mitigate risk by making some of the diversity trainings voluntary or including disclaimers (e.g., trainings are provided purely for education and are not intended to compel employees to believe any of the concepts discussed).
- Monitor State Laws Limiting DEI Programs: Continue to monitor state laws and regulations aimed at limiting DEI programs and determine whether those laws could affect the company’s diversity training, programs, and strategies.