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Minh Connors

The complaints have been rolling in since spring. McDonald’s, Hershey and Alaska Airlines were targets, as were Anheuser-Busch and Nordstrom. Each was filed by a conservative legal group founded by a former adviser to <a href="https://www.washingtonpost.com/donald-trump/" target="_blank" class="contextual_link">Donald Trump</a>, each alleging that diversity initiatives at companies are discriminatory, illegal and symptomatic of wokeness run amok.

Now that the Supreme Court has struck down the use of race-conscious admissions at colleges and universities, conservative groups and legal experts say the private sector should get ready for more challenges to their diversity, equity and inclusion, or DEI, initiatives.

Though the ruling is not expected to have direct legal implications on private-sector employment practices, it “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,” said Will Hild, the executive director of Consumers’ Research, a right-wing <a href="https://www.washingtonpost.com/climate-environment/2023/01/30/climate-change-sustainable-investing/" target=_blank>advocacy</a> group that has taken aim at the use of environmental and social considerations in the finance sector.

Hild said legal precedents that allowed race-conscious admissions at colleges and universities have been a “fig leaf” for the private sector’s diversity initiatives. “Once that goes away,” he said, “it is going to be a free-for-all on pushing back against that.”

The question of race during the admissions process has come before the high court multiple times over the past four decades. Until Thursday, such policies have, to a degree, been left in place. Supreme Court precedent has not been as favorable to affirmative action preferences in employment as it has been to college admissions, said Gail Heriot, a law professor at the University of San Diego, but conservative groups and legal experts said the new ruling creates an opening.

“I do believe that it will have an effect,” Linda Chavez, the chairman of the Center for Equal Opportunity, a conservative think tank that has been pressing companies to change their diversity programs. “I think you will see groups like ours looking closely to ensure that employers are not giving race undue influence in decisions about whom to hire or to promote.”

Alvin Tillery, a professor of political science at Northwestern University who runs a firm that consults Fortune 500 companies on how they carry out their diversity initiatives, said a ruling to end affirmative action will have a chilling effect on companies, which might wind down their DEI programs to avoid lawsuits or threatening letters from conservative activists.

“What I have been trying to urge my clients to think about is that you do not want to become overly compliant,” Tillery said. “If the Supreme Court strikes down affirmative action in college admissions, do not let your corporate counsel just say, ‘Oh, that is a wrap.’”

Corporate DEI programs gained momentum in 2020 after George Floyd was <a href="https://www.washingtonpost.com/nation/2021/12/15/derek-chauvin-trial-federal-charges/" target=_blank>murdered</a> by a Minneapolis police officer. Companies worldwide, under public pressure to show their commitment to racial justice, spent an estimated $7.5 billion that year on the measures intended to diversify their workforces and leadership teams.

That included retailers such as Nike, technology companies such as Amazon, and even the fast-food chain Chick-fil-A, a darling of conservatives because of its stance on LGBTQ+ issues. But those <a href="https://www.washingtonpost.com/business/2023/04/01/woke-capitalism-esg-dei-climate-investment/" target=_blank>efforts</a> have since tapered off and come under fire from conservative groups and politicians, who condemn the diversity initiatives as unconstitutional and underpinned by liberal values.

The battle over DEI initiatives is only one example of the private sector getting caught in the crossfire of culture wars. Conservatives angry over a Bud Light ad featuring a transgender influencer this spring prompted a <a href="https://www.washingtonpost.com/business/2023/06/14/bud-light-modelo-top-selling-beer/" target="_blank">boycott</a> of the popular beer, and sales have suffered. In May, Target removed Pride Month merchandise after angry shoppers threatened employees, prompting more <a href="https://www.washingtonpost.com/business/2023/06/04/target-lgbtq-culture-wars/" target="_blank">backlash</a>. In March, some Republicans <a href="https://www.washingtonpost.com/business/2023/03/14/svb-esg-woke-investing/" target="_blank">blamed</a> the collapse of Silicon Valley Bank on DEI initiatives and investing that considers environmental, social and governance factors.

Since last year, America First Legal, the group run by former Trump aide Stephen Miller, has filed at least nine complaints with the Equal Employment Opportunity Commission against a host of major companies. It has accused them of “hiring people based solely on immutable characteristics, like race or sex, rather than qualifications or abilities,” which the group has argued is a violation of federal civil rights law. If the EEOC declines to investigate those claims, America Legal First has the right to sue, legal experts said.

McDonald’s, Alaska Airlines, Anheuser-Bush and Nordstrom did not respond to requests for comment. Hershey declined to comment. Mars was among the companies targeted by America First Legal. The maker of M&amp;Ms, Snickers and other popular food and snacks brands said in a statement that it is an equal-opportunity employer and does “not engage in discriminatory employment practices.” It added, “Inclusion and diversity have long been priorities for us, and we use lawful means to pursue our inclusion and diversity objectives.”

In July 2022, America First Legal also launched a proposed class-action lawsuit against Amazon, alleging that a company program that awards $10,000 grants to certain Black, Latino and Native American entrepreneurs to start delivery businesses violates federal civil rights law. The lawsuit remains active. Amazon declined to comment on the lawsuit.

But company spokesperson August Aldebot Green said Amazon believes in the importance of diversity, equity and inclusion, adding that it looks into the potential impact of any legal decisions on its programs and adjusts them to comply with the law. (Amazon founder Jeff Bezos owns The Washington Post. Interim Post chief executive Patty Stonesifer sits on the Amazon board.)

After the decision on Thursday, Gene Hamilton, general counsel at America First Legal, said the group “will be redoubling our efforts in the weeks and months ahead to advance equality under the law for all Americans, especially in the private sector.”

Such challenges are limited to individual companies. In August 2021, the Securities and Exchange Commission <a href="https://www.washingtonpost.com/business/2020/12/01/nasdaq-diversity-board-directors/" target=_blank>approved</a> a Nasdaq rule mandating companies on the exchange to have at least two diverse directors or explain why they have none. Two conservative groups sued to invalidate it, arguing the requirements were unconstitutional. The rule remains in effect as the case is being decided by the U.S. Court of Appeals for the 5th Circuit.

One of the groups, the Alliance for Fair Board Recruitment, is also challenging a pair of California laws that impose board diversity requirements on companies based in the state. The case is being decided by the U.S. Court of Appeals for the 9th Circuit.

Jonathan Berry, a lawyer with Boyden Gray &amp; Associates who represents the Alliance for Fair Board Recruitment, said in a statement Thursday that the Supreme Court “decision will likely reverberate far beyond academia.” He said, “In particular, employers should be fully on notice that diversity is not an appropriate justification for race-discriminatory affirmative action in the workplace.”

How corporations prevent discrimination falls under a different area of law than college admissions, so the Supreme Court ruling is not likely to have a direct impact on the legality of diversity initiatives at companies, according to legal experts. Whereas college admissions are governed by Title VI of the Civil Rights Act of 1964, private employment falls under Title VII. Both prohibit discrimination based on race, color or national origin.

A ruling to end affirmative action in university admissions “will send a strong signal as to how the court might lean if it was confronted with an employment case under Title VII,” said Daniel Pyne III, a labor attorney with Hopkins &amp; Carley. That would mean more challenges under that specific statute, Pyne added, and “I would generally expect to see the court come down the same way.”

But Evan Caminker, a law professor at the University of Michigan, said the opinions of the justices are narrowly tailored to affirmative action in the education context, so they are not addressing “other contexts in which race might be legitimately taken into account in the private sector.”

Companies are nonetheless thinking of ways to protect their diversity policies from future litigation, including revising phrasing that might mirror that of affirmative action in college admissions, said Crystal Styron, a senior principal at market research firm Gartner.

“Some companies have racial quotas when it comes to hiring and promotions, and there is speculation those sorts of practices could now come under legal scrutiny,” Styron said. She added that Gartner recommends companies create policies that do not exclusively mention race and instead focus on things such as “fostering inclusive culture.”

Tillery, the Northwestern professor and diversity consultant, said he will recommend that companies stop using the word “diversity” and the acronym “DEI” to label their initiatives. “We have to start calling them Title VII compliance programs,” he said. “So the chief diversity officer is going to become the Title VII compliance officer. Inclusion training is going to be Title VII compliance training.”

Humboldt State University, BA in Globalization Studies 

Julian Mark covers breaking business and technology news for The Washington Post. He previously worked overnight with The Post's Morning Mix team. Before joining The Post, he covered housing and policing for Mission Local in San Francisco.  

Julian  Mark

Columbia University, MS in Journalism; St. Olaf College, BA in English

Eli Tan is a business reporter at The Washington Post. He lives in Washington, D.C.

Eli Tan

Affirmative action ruling puts target on corporate diversity programs

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The Washington Post

Affirmative action ruling threatens corporate diversity programs

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