How Does The Supreme Court's Affirmation Action Rulings Affect Employer DEI Initiatives?

• Published date: 12 July 2023
• Subject Matter: Corporate/Commercial Law, Employment and HR, Government, Public Sector, Discrimination, Disability & Sexual Harassment, Employee Rights/ Labour Relations, Government Contracts, Procurement & PPP, Diversity, Equity & Inclusion
• Law Firm: Arnold & Porter
• Author: Mr David Reis, Dipanwita Deb Amar, Joshua Alloy, Matthew R. Diton and James W. Kim

The highly anticipated United States Supreme Court decisions regarding affirmative action in higher education have been the topic of much discussion around water coolers and boardrooms alike. On June 29, 2023, the Court issued two rulings (hereafter referred to as "the SFFA Opinion")¹ that severely limit the use of race in admissions processes at universities (see our prior Advisory, which provides a summary of the ruling for more details).

While the SFFA Opinion does not directly apply to private employers, companies have nonetheless begun to consider the impact of the ruling on their own efforts to increase diversity, equity, and inclusion (DEI) in the workplace. But despite the attention-gathering headlines in the press, the SFFA Opinion has not sounded the "death knell" for all such DEI efforts. Any corporate DEI efforts that were lawful before June 29 are still lawful today, and vice versa for anything that was unlawful before June 29. Nevertheless, the SFFA Opinion will assuredly increase the scrutiny placed on DEI efforts by employers, whether by private litigation or state or federal efforts to curb the use of DEI in the workplace. Indeed, just a few days ago, on July 7, 2023, Senator Tom Cotton sent a letter to the CEO of Target referencing the SFFA Opinion and stating that, if the company did not end certain DEI initiatives, it "should expect significant and likely costly litigation." This Advisory provides a brief overview of the existing law and some considerations for employers that are revisiting their various diversity policies following the SFFA Opinion.

Existing Law Regarding "Affirmative Action" for Private Employers

Title VII of the Civil Rights Act of 1964 ' the federal statute governing private employers ' has, with some narrow exceptions, long prohibited the use of protected classifications (such as race, gender, etc.) as a factor in employment decisions.² The same is true for most state and local laws that prohibit employment discrimination on these and other protected characteristics. This may come as a surprise to many who assume (erroneously) that racial and gender diversity is a legitimate factor to consider in employment decisions such as hiring or promotion. Title VII does permit employers to engage in "affirmative action," but only in exceptionally limited circumstances to overcome the effects of past or present discrimination, where the employer (1) conducts a self-analysis to determine whether its employment practices have...