While the Supreme Court's recent decision in Students for Fair Admissions v. President and Fellows of Harvard College was explicitly limited to the educational setting, its prohibition of race-based affirmative action programs in college admissions has prompted concerns that employers' diversity, equity, and inclusion (DEI) programs might become the subject of the next legal challenge. Thirty-four attorneys general have now entered the fray, with views about the case's impact breaking along party lines.
A mere two weeks after the issuance of the decision, thirteen Republican attorneys general explicitly took aim at corporate DEI programs in a letter to the CEOs of Fortune 100 companies, warning of an obligation to "refrain from discriminating on the basis of race, whether under the label of 'diversity, equity, and inclusion' or otherwise." Hailing from Alabama, West Virginia, Mississippi, and Indiana, among other states, the Republican AGs targeted what they termed "racial quotas and preferences" in employment and supplier determinations and in interactions with contractors. Expanding the Students for Fair Admissions decision beyond its narrow contextual bounds, the Republican AGs warned that it precluded employers from utilizing "racial hiring in the name of seeking racial diversity," and "should place every employer and contractor on notice of the illegality of racial quotas and race-based preferences in employment and contracting practices," which purportedly signal an "underlying bias." The letter ultimately threatened that the AGs "intend to enforce the law vigorously" if their warnings are met with inaction, and that entities will be accountable "sooner rather than later" if they fail to comply.
In response, twenty-one Democratic attorneys general—from the District of Columbia, New York, New Jersey, California, and Colorado, among other states—published their own letter, decrying what they called Republican "intimidation" efforts seeking to "roll back the progress" that Fortune 100 companies had made in fostering diversity within their workforces. Taking issue with their Republican counterparts' "baseless assertion that any attempts to address racial disparity are by their very nature unlawful," the Democratic AGs' letter made clear that Students for Fair Admissions has no bearing on the legality of DEI initiatives, which they describe as critical for combatting persistent racial inequity and beneficial, both socially and economically. Addressing what they deemed "hollow claims of unlawful discrimination against white people" posited by the Republican AGs' letter, the Democratic AGs cited diversity statistics from a 2022 report of CEOs at Fortune 100 companies, which reflected a clear numerical disparity between white executives on the one hand and female executives and executives of color on the other. Noting that Title VII of the Civil Rights Act of 1964 has prohibited race-based hiring since well before the Supreme Court rendered the recent decision, the letter encourages employers to continue examining and refining their recruiting, retention, and professional development practices to remove "unnecessary barriers" to diversity.
So how do employers thread this needle? And how do they ensure they maintain diverse workplaces, without confronting accusations that their DEI initiatives are but race-based quotas in thinly veiled disguises? As our colleagues have previously noted, employers should view the Supreme Court's opinion in Students for Fair Admissions not as a directive to eliminate DEI initiatives—because it is not one—but as a challenge to think more critically about how diversity impacts their organizations, and how to achieve that diversity by making hiring and other employment decisions based on permitted criteria and goals rather than racial quotas and stereotypes. As part of that process, employers should revisit their policies, training materials, and recruiting and marketing materials to assess whether they align with applicable law while also continuing to strengthen the organization's overall diversity.
Time will tell what sorts of legal challenges private employers might face in light of the diverging viewpoints reflected in the AG letters. Employers who have questions about their DEI initiatives following the issuance of those letters should consult the authors of this article or any member of Venable's Labor and Employment Group.