‘Hold true to your values’: D&I under threat in the US

As SCOTUS bars affirmative action in colleges and law firms face suits over their diversity programmes, campaigners warn that this is not the time to abandon the good fight. Muireann Bolger reports.

In June 2023, the US Supreme Court delivered a bombshell ruling when it held that race-based affirmative action programmes in US colleges fall foul of the US Constitution.

In the cases, Students for Fair Admissions v University of North Carolina and Students for Fair Admissions v Harvard University, the US’ highest court found that race-based affirmative action programmes in college admissions processes violate the Equal Protection Clause of the Fourteenth Amendment.

The impact was immediate and profound: the organisation America First Legal—founded by the former advisor to Donald Trump, Stephen Miller—declared that “all diversity programmes” were now “illegal”.

And it continues to reverberate, as law firms become the latest target in the war being waged over diversity initiatives in the US.

In August, Perkins Coie and Morrison & Foerster were hit with lawsuits filed by the American Alliance for Equal Rights led by conservative activist Edward Blum, which claim that their diversity fellowships are discriminatory.

Meanwhile, Republican senator Tom Cotton warned dozens of firms to “preserve relevant documents in anticipation of investigations and litigation” over race-based employment practices.

Elsewhere, five Republican attorneys-general warned US firms to “immediately terminate any unlawful race-based quotas or preferences” or risk being “held accountable—sooner rather than later”.

Such developments have exerted a chilling effect on the progress of diversity and inclusion (D&I) initiatives: research by Bloomberg showed that the instances of such discussions on earnings calls and at conferences among Russell 3,000 Index companies dropped by 54% from a year ago in the third quarter to the lowest since 2018.

For a country that is still grappling with the legacy of institutionalised racism and ingrained prejudice, these trends are—to put it mildly— disheartening for those who have long campaigned for meaningful change.

WIPR Diversity asked three leading D&I voices in law about their views on the rulings and their ramifications, and what can be done to prevent constraints on future progress.

Jean Lee, President and chief executive officer, Minority Corporate Counsel Association

“Every company wants to grow and scale its business, and to do that, you need to focus on equity. Such a focus is only in danger, if you allow it to be.”

"I am concerned about what’s happening because such lawsuits distract us from focusing on the important issues that we still need to work upon.

They are scare tactics to create noise and generate publicity. So that stokes fear and deters people who either have previously viewed D&I as unimportant (but didn’t say it out loud), or those who are just lagging behind when it comes to implementing long-term sustainable strategies.

My understanding is that the Supreme Court’s decision is very narrow, and only applies to college admissions. But there are those who are using these cases as a potential precedent and filing discrimination-based claims against diversity programmes. But from what we can read, the precedent doesn’t apply to many organisations, which mainly aspire to become more inclusive. Their programmes do not dictate quotas; they are aspirational goals that are being perceived and construed incorrectly as quotas.

In fact, we all aspire to do things better and have rational goals that are not mandatory, required or illegal. Having aspirational goals is not illegal. I do see how the ruling and lawsuits have led to concerns and fears, but I think people are afraid of something that is not really something to be afraid of, and which isn’t factually supported. Undoubtedly, some corporations and employers feel that they are in a tough position because they are between a rock and a hard place. But the facts are that the younger generation of people—Generation Z—comprise 25% of the workforce, and they really care about these issues.

And despite all of the money and the resources we’ve spent, there is so much more to be done. In 1979 women were paid 40% less than men. Fast forward 40 years later and women are still paid 15 to 25% less than men.

So in four decades we were only able to close that gap by half. Every company wants to grow and scale its business, and to do that, you need to focus on equity. Such a focus is only in danger, if you allow it to be in danger.

There’s a choice: either choose a long-term profitable business strategy, and do the right thing by opting for a moral ground that sets you apart from your competitors, or you choose to stay silent. Yet, people will notice when you are silent on issues that matter. People notice even more, obviously, when you are not doing something about them.

I believe the majority of the companies and law firms are going to stay the course because those who continue to stand strong and be visible on these issues are going to win. It’s not about preferential treatment. It is the opposite, it’s about trying to advance people in parity and in representation, and when you are focused on equity— for all,not some— your company is going to do better. And those are the companies that will continue to thrive."

David Glasgow, executive director, Meltzer Center for Diversity, Inclusion, and Belonging, Adjunct Professor of Law, New York University School of Law

“What we are seeing now is a battle between two competing views.”

"In recent months and years, we have seen a sustained political and legal attack on D&I, which is part of a broader backlash to the surge of D&I activity after the murder of George Floyd in 2020. The US Supreme Court’s decision in June 2023 in Students for Fair Admissions (SFFA), which effectively ended the practice of race-conscious admissions in higher education, is a critical component of those attacks.

Blum, the conservative legal strategist behind the SFFA lawsuit, said prior to the decision that he hoped it would provide “the US with a legal doctrine that can be applied with regards to employment, to fellowships and scholarships, to voting and contracting issues, and that this doctrine will be the beginning of the restoration of the great colourblind covenant that has held together this country through very difficult periods of history”.

We have seen him attempt to achieve that goal subsequent to the decision with lawsuits against the Fearless Fund (an organisation that provides grants to Black women entrepreneurs) and two major law firms that offer diversity fellowships. What we are seeing now is a battle between two competing views. One is a view that says we need to pretend we can’t see colour and treat efforts to address racial inequality as equivalent to efforts to entrench it.

The other is a view that recognises that we do not yet live in a just and equal society, and that institutions need to adopt proactive measures to correct bias in the system. I am concerned that the current conservative supermajority on the US Supreme Court is more sympathetic to the former view than the latter view, and that in the years ahead we will see the consequences of that view play out in fields beyond higher education, such as employment.

The SFFA decision was based on the Equal Protection Clause in the US Constitution (which applies to governmental actors) and Title VI of the Civil Rights Act of 1964 (which applies to programmes that receive federal funding). D&I programmes in private workplaces are governed instead by Title VII of the Civil Rights Act of 1964, the main federal employment discrimination statute. Even though the SFFA decision did not directly address Title VII, I expect that the court in a future case will apply similar reasoning to Title VII, holding that employers cannot engage in race-based or sex-based affirmative action when making employment decisions such as hiring or promotion.

Importantly, D&I initiatives go far beyond race-and sex-based affirmative action. For example, employers offer employee resource groups and mentorship programmes, conduct targeted outreach to diverse universities, conduct training on D&I issues, audit policies and practices to reduce implicit bias in recruitment and promotion, and provide employee benefits like flexible work options and nursing rooms. These are all D&I initiatives, but they do not involve consideration of factors such as race or sex in employment decisions. So while I expect the law of employment discrimination to evolve in a conservative direction, I think there will continue to be a lot of D&I initiatives that remain legal.

Organisations need to remember that risks exist on both sides. If organisations abandon or water down their D&I initiatives, and as a result, their ‘neutral’ systems lead to a more homogeneous workforce or result in marginalised people experiencing more bias or exclusion, they will heighten their own risk of being sued for traditional employment discrimination. In other words, D&I initiatives don’t just create legal risk; they also reduce legal risk.

Additionally, organisations should conduct a self-audit with their legal counsel to examine any legal risks that may exist in their current D&I initiatives, and then think about smart tweaks to shore up their programmes over the long term. For example, if an organisation has programmes that limit participation to members of particular social groups, it would be worth considering whether to open up the programme to allies as well. Finally, organisations should consider their values and why they do D&I work in the first place—to ensure that everyone, regardless of identity or background, has a fair opportunity to thrive. Blum and his ilk will continue to fight D&I work in courtrooms and the court of public opinion, but there is no need to do his work for him. Put up a fight and hold true to your values."

Caleb Green, attorney, Dickinson Wright

“We’ve seen a lot of branding mistakes by companies, and their lawyers, due to a lack of cultural awareness.”

"While the recent affirmative action decision by the Supreme Court has resulted in challenges to D&I efforts in the US legal industry, such efforts should remain a priority for firms and legal practices, particularly in trademark practice.

Recently, we’ve seen a lot of branding mistakes by companies, and their lawyers, due to a lack of cultural awareness that can be tied to a lack of diversity in their trademark/branding teams and failure to include cultural, or social-political issues in their trademark and branding clearance processes.

For example, in 2022, Walmart rolled out the Juneteenth ice cream with the TM symbol affixed to the ice cream products, which sparked public outrage from the African-American community because Juneteenth is a federal holiday commemorating the end of slavery in the US.

Adidas came under fire after it filed an opposition against a trademark application filed by Black Lives Matter Global Network Foundation, which featured three parallel stripes. Another example was Michael Jordan’s ‘J’ouvert’ trademark issue, which was deemed to be cultural misappropriation of Caribbean traditions. Cosmetics company Hard Candy faced backlash for attempting to register ‘#MeToo’ for cosmetic products.

These examples highlight the importance of cultural and social awareness, which can be directly addressed by having diverse attorneys and legal professionals on your trademark and branding teams. More importantly, these examples also highlight why cultural concerns must be included in the trademark, copyright and branding clearance process.

While US firms will remain under pressure to do away with D&I programmes and initiatives, there are benefits to having a diverse workplace, especially in the trademark and branding industries. Trademarks and brand integration involve a great degree of consumer perception and engagement, so it behoves the firms and IP practitioners to maintain and continue their D&I initiatives."