WASHINGTON (Legal Newsline) - Large employers are caught in the middle as Republican and Democratic attorneys general offer conflicting advice – and outright threats – over how to comply with anti-discrimination laws in the wake of the U.S. Supreme Court’s decision outlawing race-based college admissions policies.
Republican AGs fired first with a July 13 letter to Fortune 100 chief executives, warning that so-called diversity, equity and inclusion or DEI policies that set aside jobs and contracts based on race are illegal. The Supreme Court’s decision Students for Fair Admissions v. Harvard extends to “other areas of life,” the AGs said.
“Race-based employment and contracting violates both state and federal law, and as the chief law enforcement officers of our respective states we intend to enforce the law vigorously,” the letter states. “Well-intentioned racial discrimination is just as illegal as invidious discrimination.”
Nevada AG Aaron Ford responded with a July 19 letter signed by 20 other Democratic AGs accusing their Republican counterparts of trying to intimidate corporations and “undermine efforts to reduce racial inequities in corporate America.”
“We are focused on actual unlawful discrimination, not the baseless assertion that any attempts to address racial disparity are by their very nature unlawful,” the Democratic AGs said. “Corporate efforts to recruit diverse workforces and create inclusive work environments are legal and reduce corporate risk for claims of discrimination. In fact, businesses should double-down on diversity-focused programs because there is still much more work to be done.”
The dueling messages represent a significant escalation in the rivalry between Republican and Democratic AGs, who historically have signaled disagreement by declining to join multistate litigation. It also leaves corporations in a quandary, since the chief legal officers of their states lay out distinctly different interpretations of the law after the Students for Fair Admissions decision.
Employers have long faced lawsuits accusing them of racial and sex discrimination, often using statistical measures to prove that hiring and promotion practices have a negative effect on women and minorities. Now the Supreme Court’s “broad rulings in favor of race neutrality and harsh criticism of affirmative action in the college setting could accelerate the trend of reverse-discrimination claims,” said Gibson Dunn in a recent letter to clients.
The Republican AGs warn as much in their letter, citing policies at large corporations setting explicit goals for minority employees and contractors. Microsoft, for example, says it is committed to increasing purchases from minority-owned suppliers and while it denies specific quotas, it says it requires annual disclosures from its top suppliers and “tracks diverse spend as sone of the company’s top metrics.”
“We urge you to immediately cease any unlawful race-based quotas or preferences your company has adopted for its employment and contracting practices,” the Republican AGs said in their letter. “If you choose not to do so, know that you will be held accountable -- sooner rather than later -- for your decision to continue treating people differently because of the color of their skin.”
The Democratic AGs countered by stating “removing barriers does not constitute an act of racial discrimination.” Companies can maintain DEI programs and meet diversity goals by adjusting their recruiting practices, improving promotion and retention policies and using leadership programs.
“Companies need not don a veil of ignorance and pretend that racial inequities do not exist,” the Democrat AGs said.
The Supreme Court’s decision on college admissions doesn’t directly address employment, but it is based upon the idea that college admissions, like hiring, is a zero-sum game where setting aside a position for one person necessarily denies it to another. The majority specifically held that Title VI, which applies to colleges receiving federal aid, prohibited using race as a factor in admissions decisions.
Title VII and Section 1981 of federal law apply to employers. Existing law and Supreme Court precedent allow companies to use affirmative action programs to address prior discrimination, but Justice Neil Gorsuch, in a concurrence, said Title VI and Title VII use the same terms that have “the same meaning.”
Commissioners at the Equal Opportunity Employment Commission offered conflicting advice. Democratic Chair Charlotte Burrows said the decision doesn’t affect corporate DEI programs. Republican Commissioner Andrea Lucas, however, said employers need to give “a hard look at their corporate diversity programs.”
The Supreme Court has allowed programs that are “temporary, narrowly tailored to the company or industry at issue, and justified by a `strong basis in evidence’ that remedial action is necessary,” she wrote in a recent article published on Reuters. ”A general interest in diversity or `equity’ is not sufficient to allow race- or sex-motivated employment actions.”
Gibson Dunn urged its clients to be careful as well, warning that the college admissions decision “likely will encourage additional litigation.”
“Plaintiffs’ firms and conservative public-interest groups likely will bring reverse race-discrimination claims against some employers with well-publicized diversity programs,” the law firm wrote. ““Government authorities such as state attorneys general might also increase enforcement efforts.”