Attorneys general from 13 states recently sent a letter to business leaders, warning them to end racial preferences in hiring.
On July 13, the attorneys general of Alabama, Arkansas, Indiana, Iowa, Kentucky Nebraska, Mississippi, Missouri, Montana, South Carolina, Tennessee and West Virginia signed the letter, addressed to Fortune 100 CEOs. It comes just weeks after a Supreme Court decision ended affirmative action in college admissions.
The letter said companies will face “serious legal consequences” if they continue hiring practices that take race into consideration.
“Racial discrimination in employment and contracting is all too common among Fortune 100 companies and other large businesses,” the letter noted. “These discriminatory practices include, among other things, explicit racial quotas and preferences in hiring, recruiting, retention, promotion, and advancement. They also include race-based contracting practices, such as racial preferences and quotas in selecting suppliers, providing overt preferential treatment to customers on the basis of race, and pressuring contractors to adopt the company’s racially discriminatory quotas and preferences.”
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Targeting DE&I Initiatives
The letter targets corporate diversity, equity and inclusion (DE&I) programs. The letter reflects a longstanding Republican goal of curtailing corporate diversity efforts that many conservatives see as hiring or promoting people of color at the expense of fairness to all.
Companies have for years sought to have their workforce reflect the demographics of a multiracial nation, saying a diverse workplace is good for business. Pew Research found in a February poll that 54 percent of Americans feel their company pays the right amount of attention to diversity initiatives.
In general, corporate diversity initiatives typically don’t seek to hire one applicant over another because of race, but instead focus on expanding applicant pools or changing hiring procedures.
‘Potential Legal and Reputational Risk’
The Supreme Court’s ruling applies only to college admissions and does not affect a company’s ability to take race into account when considering job candidates, but legal experts have warned that the decision could impact how courts analyze legal challenges regarding recruiting, hiring and promotion. The ruling could put companies in a more tenuous position when it comes to such cases, and the recent letter serves as a warning sign of how seriously some states may pursue action.
Morgan Lewis, a law firm specializing in labor and employment litigation, said businesses should consider the potential legal and reputational risk of their hiring practices and proactively reevaluate their existing DE&I programs.
Nearly 70 companies signed a friend-of-the-court brief last year, urging the Supreme Court to keep affirmative action in place. They warned that less diverse student bodies could lead to less diverse pools of talent. The brief—signed by companies including Apple, Google, Airbnb, Lyft and Uber—said that DE&I efforts strongly rely on university admissions programs that lead to graduates educated in racially and ethnically diverse environments.
Democrats Disagree with Court Decision
The letter specifically called out several companies, including Airbnb, Facebook, Google, Goldman Sachs, Microsoft and Netflix, for their programs to increase racial diversity in their workforce and supplier networks.
Despite the forceful nature of the letter, only about half of the nation’s Republican attorneys general signed it, while Democrats have criticized the Supreme Court’s decision on affirmative action.
The Democratic Attorneys General Association called the letter “anti-diversity, anti-business, and anti-economy.”
DE&I Programs Differ from Quotas
Conservatives have recently stepped up their attacks on businesses over what they perceive as “woke” policies, namely around diversity initiatives and ESG-related efforts. Defenders of corporate DE&I initiatives note that many of the things that employers have adopted, such as statistical breakdowns of their workforce or setting hiring goals, are aspirational and nonbinding.
(Politico)
High Court Makes Affirmative Action Illegal
On June 29, the U.S. Supreme Court voted to curb affirmative action in higher education—ending a four-decade precedent that allowed colleges and universities to broadly consider applicants’ race in their admissions processes. The ruling came in response to a pair of lawsuits accusing Harvard University and the University of North Carolina of racial discrimination in admissions.
In the workplace, DE&I programs, including training initiatives, outreach efforts, racial equity audits, equal pay provisions and other methods, promote equal opportunity for job applicants and employees.
The Supreme Court’s ruling could lead to fewer employment opportunities for people of color—if fewer are admitted to colleges because of the removal of race-conscious admissions practices—and, as a result, impact employers’ recruiting and hiring efforts in the future.
Diversity Declined Without Affirmative Action
Racial diversity in the workplace significantly declined in several states in the years after they outlawed affirmative action in college admissions, according to a 2013 study by Harvard University.
The study, which examined the years 1990 to 2009, assessed employment data from nearly 6,000 state and local government agencies in California, Michigan, Nebraska and Washington state in the years following their prohibition of affirmative action.
Federal Contractors Must Consider Race, Disability, Veteran Status
Three separate laws require certain employers that do business with the federal government to implement affirmative action programs.
- Under Executive Order 11246, federal contractors and subcontractors with 50 or more employees who have entered into at least one contract of $50,000 or more with the federal government must maintain a program for recruiting, hiring and promoting of women and minorities.
- Section 503 of the Rehabilitation Act of 1973 requires contractors with 50 or more employees and contracts over $50,000 to take affirmative action with regard to individuals with disabilities.
- The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) requires contractors to take affirmative action to employ and promote veterans with service-connected disabilities, recently separated veterans and other protected veterans. VEVRAA requires that contractors with 50 or more employees and a contract of $150,000 or more to have a written affirmative action program.