Comprehensive DE&I Strategies May Result from Supreme Court Ruling

Allen Smith, J.D. By Allen Smith, J.D. July 19, 2023

​Employers may not see sweeping changes to voluntary and mandatory affirmative action in employment, which some observers forecast following the Supreme Court's recent ruling striking down affirmative action in higher education. Instead, diversity, equity and inclusion (DE&I) strategies may evolve as a result of the decision and shift to focus more on inclusion.

With the possibility of race-conscious considerations facing more legal challenges and greater legal scrutiny, private employers may adopt more comprehensive diversity strategies that address various dimensions of diversity beyond race, said Jimmy Robinson Jr., an attorney with Ogletree Deakins in Richmond, Va.

"They may focus on creating inclusive and equitable workplaces that promote diversity in multiple ways, including hiring practices, talent development programs, mentorship initiatives and fostering inclusive organizational cultures," he said. "By embracing a more inclusive approach, companies can cultivate a diverse workforce that goes beyond racial representation alone."

Demographic Shift in Higher Education Expected

The Supreme Court's decision, which involved race-conscious admissions policies at both Harvard College and the University of North Carolina (UNC), "paves the way for a shift in the demographics of all institutions," Robinson said. "At elite universities, this shift is likely to result in a student population that becomes increasingly dominated by white and Asian individuals, while potentially leading to a decrease in the representation of Black, Latino and Native American students."

An appeal brought by Students for Fair Admissions challenged the legality of the admissions programs used by Harvard and UNC to promote a racially diverse student body.

The Supreme Court held that the admissions programs used by Harvard and UNC were inconsistent with the principles in the Equal Protection Clause of the U.S. Constitution, which guarantees equal protection under the law for all individuals, Robinson said.

The court ruled that the universities' admissions programs violated the Equal Protection Clause because they lacked sufficiently focused and measurable objectives warranting the use of race, "unavoidably employ race in a negative manner, involve racial stereotyping and lack meaningful end points," said Raymond Perez, an attorney with Fisher Phillips in Columbus, Ohio.

Now that higher education institutions are extremely limited in how they consider race during the application process, a potential decline in diversity at the institutions may lead to less diversity in an employer's applicant pool, Perez said.

Nothing prohibits the schools from considering an applicant's discussion of how race affected their life, so long as the discussion is concretely tied to a quality of character or unique ability that the applicant can contribute to the school, he added.

The decision doesn't apply to employers, but Perez said they should carefully review their DE&I programs to confirm they are making decisions based on legitimate nondiscriminatory factors and avoiding the use of race in their employment decisions. Other protected categories shouldn't be used in employment decisions either, he added.

"Employers should continue to review all their employment practices, specifically including recruiting practices, to ensure they are casting as wide a net as feasible to compete for the best talent to meet their workforce needs," he said.

Limits to Decision’s Reach

"It's important to note that the prohibition on race discrimination in education is under Title VI [of the Civil Rights Act of 1964], whereas the prohibition on race discrimination in employment is under Title VII," said Jonathan Segal, an attorney with Duane Morris in Philadelphia. "Historically, colleges and universities have had greater flexibility to consider race under Title VI than employers have had under Title VII."

Mandatory affirmative action for employers and voluntary affirmative action both survive the Supreme Court's decision.

"Mandatory affirmative action for employers typically comes about through contracting with the federal government and sometimes state governments," said Craig Leen, an attorney with K&L Gates in Washington, D.C., and former head of the Office of Federal Contract Compliance Programs. "Mandatory affirmative action is highly regulated with clear requirements as to what may and may not be in a program, with quotas, preferences and set-asides being strictly prohibited," he said.

Mandatory affirmative action requires an annual assessment by the employer of representation of women and minorities by job group compared to availability in the workforce, he noted. If underrepresentation is identified, good-faith steps must be taken to increase opportunity and representation over time, such as through outreach and recruitment.

"Similar steps are taken to identify underrepresentation of individuals with disabilities and veterans, with steps again taken to ensure equal opportunity for these protected groups," Leen said.

Voluntary affirmative action is a legal concept under Title VII case law and guidance from the U.S. Equal Employment Opportunity Commission, he explained. When there is a material underrepresentation—also called a manifest imbalance—as to race, ethnicity or gender in the workforce, a company can choose to create a voluntary affirmative action program that seeks to enhance opportunity for underrepresented groups. This is typically done through outreach, recruitment, training and the elimination of barriers, Leen noted.

DE&I programs are related to voluntary affirmative action programs as they are both voluntary and seek to enhance equal employment opportunity in the workplace through initiatives and programs, such as outreach and recruitment, he said.

Action Steps

Companies should strive for diversity, equity, inclusion and access programs to follow the guidance related to voluntary affirmative action programs, Leen recommended. "For voluntary affirmative action programs and DEIA [diversity, equity, inclusion and accessibility] programs, quotas, preferences and set-asides are also prohibited," he said.

He recommended that companies analyze for underrepresentation of protected groups in the workforce and create plans for addressing underrepresentation such as outreach, recruiting, mentorship programs and employee resource groups.

"Employers should seek to ensure accessible workplaces, including digital and website accessibility," he said. "Ultimately, the goal is to create a welcoming and inclusive work environment attractive to a diverse workforce and applicant pool."



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