The Supreme Court and the Diversity Backlash: How Employers Can Respond Now
The backlash against diversity, equity, and inclusion (DEI) in corporate America is now in full swing. Conservative politicians have turned DEI programs into a campaign issue under the banner of anti-wokeness, with an increasing number of red-state legislatures seeking to ban DEI efforts altogether. Consumer boycotts have shaken name brands. Many corporate DEI budgets have been cut in the name of austerity, while surveys of employee sentiment show a rising tide of “diversity fatigue.” Many DEI leaders, who were given a mandate to help corporations “do better” in the realm of racial justice after the murder of George Floyd three years ago, have grown dispirited in their roles. In this environment, the U.S. Supreme Court’s 6-3 decision on June 27 striking down affirmative action as unconstitutional in higher education came as another blow to advocates of DEI efforts to make the U.S. a more equitable country. With the addition of three conservative justices by President Trump, the court’s action was widely anticipated by the academic community. But it was not only universities that were gearing up for the ruling. The business community was also expecting such a ruling; an impassioned friend-of-the court brief was filed by dozens of major technology, finance, and health care companies who support DEI efforts. Ranging from American Express to Walgreens, they pleaded with the high court not to come to the result that the majority ultimately did, because the named companies rely on “racially and ethnic diverse student bodies” to find their future workers.It is certain that there will be major workplace ramifications from the affirmative-action decision, even though that case applied to higher education rather than in the business world. (College admissions are governed by Title VI of the Civil Rights Act of 1964, whereas private employment is covered by Title VII.) Immediate questions arose in many workplaces about the consequences of the court’s ruling. Will DEI programs now be weakened or banned? Can race still be considered in employment decisions? And will an activist Supreme Court look for a suitable case in which to extend its controversial educational dictates to the workplace?Though the answers to those questions are not entirely clear at this point, legal and HR experts advise advocates of DEI to be proactive. Here are five essential steps that corporate leaders can take in this new, post-affirmative action world:Remind Stakeholders Why DEI Is Beneficial to EmployersThe corporate rationale for DEI has been twofold: not only is it morally right, but it brings benefits to corporate culture and the bottom line. “Study after study demonstrates that, across organizations, diversity enhances critical thinking, creativity and collaboration, as well as productivity, profitability and performance,” wrote Ford Foundation CEO Darren Walker last week in the New York Times. “It is a national tragedy that diversity is now a contested issue rather than a common interest.” Make Sure Your DEI Programs Aren’t in Conflict With Current LawsIt’s definitely time to review your current DEI framework in consultation with your legal team and employment-law experts. “Be sure your policies and programs don’t unintentionally run afoul of anti-discrimination laws and recognize that quotas and preferences–as well as perceived unfairness–can create legal problems,” advises the Fisher Phillips law firm. “You should also review your employee handbook and other written policies to ensure they are up to date, aligned with your goals, and legally sound.” New York University legal experts Kenji Yoshino and David Glasgow, authors of a new book on how to talk about DEI in the workplace, offer easy-to-follow instructions for a “self-audit” of current DEI initiatives to avoid unwanted legal exposure. They suggest using codes to sort programs as red (high risk), yellow (medium risk), and green (low risk). But they discourage making knee-jerk semantic changes to terms like DEI or diversity: “We think it is unnecessary to revamp the language in this field. Although the court held that the universities’ interests in achieving a diverse student body did not justify a race-conscious admissions policy, companies are still allowed to strive for a diverse workforce.” Take Prudent Steps to Avoid the Possibility of a Reverse Discrimination LawsuitThe number of corporate DEI programs surged after the 2020 murder of George Floyd and the social-justice movement that followed. The result has been a fierce legal backlash, with conservative politicians, right-wing activists, and red-state legislators working strenuously to challenge them. In the wake of the Supreme Court’s new ruling, this trend is expected to intensify. Andrew Turnbull, a partner at the Morrison Foerster law firm who represents companies in labor and employment litigation, told Axios, “When people hear affirmative action has been overruled, they may say, ‘Well, why is my company still doing diversity programs?” The decision is also expected to embolden conservative activists. Will Hild, the executive director of Consumers’ Research, a right-wing advocacy group, told the Washington Post that the ruling “will put the wind in the sails of groups like ours, who want to get the woke, racially based hiring and promotion schemes out of corporate America.” America First Legal, a group headed by former Trump adviser Stephen Miller, has recently filed complaints with the Equal Employment Opportunity Commission (EEOC), asking it to investigate corporate diversity and hiring practices at major companies such as McDonald’s and Unilever. And in June, a federal jury in New Jersey ordered Starbucks to pay a white former manager $25.6 million, finding that she had been fired became of reverse discrimination.Although reverse-discrimination cases are not a new phenomenon, the potential risk of these claims may be increased by the Court’s shift in position, as well as the political ferment. Employers now should educate themselves about state legislation targeted at restricting DEI initiatives, as in Florida and Texas and brace themselves for possible challenges. This is an area that may well benefit from a lawyer’s trained eye. Alvin B. Tillery, Jr., director of the Center for Study of Diversity and Democracy, cautions against overreacting. Tillery told the New York Times, “I do worry about corporate counsels who see their main job as keeping organizations from getting sued—I do worry about hyper-compliance.”Explore New Ways of Growing Your Job Candidate PoolCorporate America has become dependent on higher education to provide a pool of job-ready, diverse candidates. That flow is certain to be stanched in the future by the court’s affirmative-action decision. “I don’t believe that there’s a dispute that university demographics will become more homogenous and less diverse,” said Janine Yancey, founder and CEO of Emtrain, an inclusion-and-belonging consultancy. This will lead to “a smaller talent pipeline,” she told From Day One. It has measurably occurred already in the nine states that have banned race-conscious affirmative action policies, generally through ballot initiatives.This has been particularly true in Michigan and California. After California voters enacted a ban on affirmative action in 1996, the number of Black students at the elite University of California campuses in Berkeley and Los Angeles plummeted. Likewise, since Michigan voters ended affirmative action in 2006, the number of Black students at the University of Michigan has dropped dramatically.Employers will need to cast a wider net now to secure a diverse workforce. Rhonda V. Sharpe, the founder and president of a think tank on equity, the Women’s Institute for Science, Equity, and Race, sees a silver lining to such a result. Said Sharpe, “I will not shed a tear for affirmative action but will rejoice in the possibilities for Historically Black Colleges … and Hispanic Serving Institutions.” In fact, the impact of affirmative action was mostly in elite universities. “The majority of Black and Hispanic students attend universities that accept more than three-quarters of their applicants,” wrote academics Richard Arum and Mitchell L. Stevens in the New York Times. “The current opportunity to bring racial equity to American higher education lies in a collective re-commitment to the quality and success of more accessible institutions.” Many DEI experts recommend that corporate HR leaders look even further upstream, investing in programs to develop underserved youth long before they make a decision about higher education. Put More Stress on Employee RetentionWith a less diverse candidate pool, experts see more problems retaining a racially or ethnically representative workforce. “No one wants to work in an environment where they are ‘the only,’” Janice Gassam Asure, the founder of BWG Business Solutions, a consultancy designed to help organizations create more inclusive environments, wrote in Forbes. She warns that the affirmative-action decision “will not only make it more challenging to retain the employees you already have, but it will likely be more difficult to attract new talent from underrepresented communities.”It is important to pay close attention to employee sentiment in the immediate aftermath of the affirmative action decision. Y-Vonne Hutchinson, the CEO of ReadySet, a DEI consulting and strategy firm, asserts that some employees may be unsettled by this decision: “Your employees, particularly those from historically marginalized backgrounds, may be experiencing anxiety, stress, sadness, fear, and disappointment right now. They may be struggling to process what this all means–for them, and their families.” Hutchinson urges companies to both “provide space” for those employees and provide support such as employment resource groups (ERGs) or extra mental health resources.Stalwarts like Iesha Berry, chief diversity and engagement officer and head of people experience at DocuSign, have no intention of giving in to the current political pressure against DEI. “It doesn’t change our focus,” said told the Wall Street Journal. Diversity is “not a stand-alone, and it’s not something that is the flavor of the day, but critically important to the business and the business success.” Andrea Sachs, a graduate of the University of Michigan Law School, began her career as a lawyer in Washington, D.C., at the National Labor Relations Board, then spent nearly 30 years in New York City as a reporter at Time magazine. She is currently the editor of The Insider, a weekly digital publication.
