Investor Advocates for Social Justice

Unequal Protection? How the SCOTUS Decision May Impact Corporate DEI Initiatives

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July 1, 2024

On June 29, 2023, the Supreme Court of the United States (SCOTUS) determined that Harvard and UNC’s affirmative action admissions programs violated the Equal Protection Clause of the Fourteenth Amendment. According to the Court, their admissions processes, which were aimed at ensuring “no dramatic drop-off in minority admission from the prior class,” used race-based measures to “stereotype” racial minorities. 

This SCOTUS decision appears to be part of a cumulative effort to push back against diversity, equity, and inclusion (DEI) programs, not only in academics, but in politics and businesses as well. Although corporate backing of DEI initiatives grew in the wake of George Floyd’s murder, some of these pledges have been criticized for being performative.1 The growth of the ‘anti-woke’ movement in the midst of the SCOTUS ruling jeopardizes the viability of already potentially fragile corporate DEI programs as anti-DEI shareholder proposals have increased in 2024. Reports have indicated further cuts in corporate diversity initiatives, especially in the tech industry,2 but concerns by shareholders have been raised across corporate sectors.

The Court’s recent decision, along with anti-DEI initiatives, threatens progress on racial equity,3 and disregards the historical purposes and protections provided by the Equal Protection Clause and affirmative action. A recent wave of anti-DEI litigation in the nonprofit sector, including the 11th Circuit decision against awarding grants to businesses owned by Black women, has created growing concern that the SCOTUS decision will be used to further dismantle corporate DEI initiatives. 

While the SCOTUS decision does not seem to impact other areas of racial equity outside of DEI, it is troublesome that the decision is being appropriated to level attacks against diversity in the workplace. Although DEI is a singular tool to promote marginalized voices in businesses, companies must remain vigilant to protect and sustain these processes. In a country marred by systemic racism, the fight to promote racial equity is of utmost importance. And, while DEI is just one facet of a company’s overall racial equity practices, protecting and promoting DEI nonetheless is a vital step towards ensuring racial equity in the workplace.

Contextualizing Affirmative Action

The 14th Amendment’s Equal Protection Clause was ratified in 1868 to ensure the recently re-integrated Southern states did not infringe upon the constitutional rights of newly emancipated Black Americans. Though the Clause intended to afford all persons the “equal protection of the laws,” racially segregated and discriminatory practices remained legal for almost another century.4

Affirmative action began to develop systematically in the 1960s to address the racial inequalities and segregation which plagued American society.5 Black, Hispanic, and Asian students, who were previously underrepresented, directly benefited from the potential of moving up the ladder of social mobility. Research conducted by William Bowen and Derek Bok showed that white and higher-income students also benefited from a more diverse academic environment.

Grutter v. Bollinger narrowed the scope of affirmative action, establishing that universities could consider race to ensure a diverse student body, however, race could not be used to give preferential treatment. The Court also imposed a final limitation on affirmative action, stating that those programs must have a “logical end” – presumptively 25 years after the decision. In its latest affirmative action decision, SCOTUS determined, despite continuing underrepresentation and discrimination in higher education, that affirmative action was no longer necessary to address systemic racism. 

Despite popular misconceptions, race has never been used as the sole basis for college admissions. Instead, it serves as one factor that can tip the scale in favor of an applicant’s acceptance. While the SCOTUS decision dealt a heavy blow to racial equity in higher education, the full extent of its impacts on hiring practices remains unknown at this point. For example, some question whether the decision will open the floodgates for litigation against companies with embedded DEI initiatives. These impacts will be explored in the next section. 

Potential Impacts

Although the SCOTUS decision appears to be limited to higher education, DEI opponents have increasingly been suing companies for “reverse-racism” related to companies’ race-conscious indicators in their hiring practices. While America First’s anti-DEI suit against Hello Alice was recently dismissed, litigation against companies employing DEI initiatives continues. America First has filed discrimination suits against companies such as Red Hat, Tyson Foods, and CBS for implementing race-conscious hiring practices. There is a growing fear that companies will begin to cut back DEI practices out of fear over potential lawsuits.6 

While the outcome of such litigation remains to be seen, we already have some insight into how SCOTUS’ ruling could affect workers from marginalized communities. California implemented Proposition 209 in 1998, which eliminated affirmative action programs in public employment, public education, and public contracting. Hispanic and Black enrollment at UC Berkeley and UCLA dropped by 40% after implementation, and has yet to recover. Although the UCs have since spent more than a half billion dollars on outreach and alternative admissions standards, school officials still report not being able to meet their imposed diversity and equity goals.7 This example underscores the importance of affirmative action.

Steps Forward

As DEI programs face pushback in the courts, it is important to continue advocating for and embedding DEI initiatives in corporate spaces. Harvard Business Review outlines a few steps companies can take to mitigate potential legal risks, including exploring DEI actions that are “identity-neutral,” but remove bias from the workplace. This can include creating structured and transparent recruitment and promotion processes that integrate a more diverse applicant pool. Proponents of racial equity must call upon corporations to continue educating their employees and to prioritize initiatives which publicly address goals to increase diversity and equity both in the workplace and throughout their value chains. As the historical protections of the Equal Protection Clause and affirmative action initiatives are under attack, we must all leverage our voices to take the necessary steps to promote racial equity.

  1. See also DEI-Related Jobs Were All the Hype After George Floyd’s Death – Now, They’re Being Cut
  2. See as example Zoom Cuts DEI Jobs and Shifts Strategy
  3. See Equity in the Boardroom – Racial equity is the process of eliminating racial disparities towards racial justice, and includes such processes as DEI initiatives. Racial equity audits are a systematic and comprehensive analysis of a company’s policies and processes to determine its commitment to racial equity.
  4. See Plessy v. Ferguson – establishing the doctrine of “separate but equal”; overturned in public schools in Brown v. Board of Education
  5. See Regents of the University of California v. Bakke – upholding the use of race as one factor in choosing applicants during the admissions process.
  6.  See also Tech Companies like Google and Meta Made Cuts to DEI Programs in 2023 After Big Promises in Prior Years 
  7.  See also Brief for the President and Chancellors of the University of California as Amici Curiae Supporting Respondents 

 

 

 

Cameron Witbeck, Legal Intern