Supreme court business impact

The Supreme Court recently upended established equal protection law with its decision in SFFA v. Harvard and SFFA v. UNC, effectively eliminating the use of affirmative action in college admissions. 

The 6-3 Supreme Court vote will effectively be eliminating the use of affirmative action, admission based on race, in college admissions. Will there be an impact on businesses as a result of this ruling? During the last few years, in the workplace, diversity, equity and inclusion (DE&I) programs including training initiatives, outreach efforts, minority hiring, racial equity audits and other methods driving advantages for minorities for job applicants and employees. 

The six conservative justices reminded the nation that the Civil Right Act of 1964 bars racial discrimination not only in college but also in employment. That includes reverse discrimination against non-minorities. The justices signaled that racial preferences in hiring and promoting are on the chopping block. At the same time, the DE&I agenda is being implemented and enforced by major American companies. Quotas, minority-only internships, affinity programs, events and diverse training are all common. Justice Neil Gorsuch explained in his concurrence that when Congress enacted the Civil Right Act, it used the same words in Title VI, which bars federally funded colleges from discriminating, as in Title VII, which prohibits employers from discriminating. Both parts of the law have the same meaning and are essential identical, Gorsuch wrote. 

This could potentially open for lawsuits of employers as the DE&I programs are based on preferences for minorities, not excluding based on race, but also on sexual orientation, veteran status, women, although race is the main driver for the programs. The main idea is to make the workforce more diverse and to focus on hiring and promoting less non-white heterosexual men. 

One aspect of the Supreme Court ruling was a view by the justices that college admission is a zero-sum game as the number of seats are determined and limited. The result was that Harvard’s racial targets and preference for African American and Hispanics led to 11.1% fewer Asian-Americans accepted. 

There have already been complaints filed against corporations for discrimination. Against Mars Inc, the candy company, which touting it will increase racial diversity in top management from 16% to 30% and against the retailer Nordstrom for a target of 50% of African Americans and Hispanics in people-manager roles by 2025. The complaints are focused on harmful impact on non-minority workers who also want a fair chance to be hired or promoted. Several other companies are facing similar legal complaints and lawsuits, among them American Express, Pfizer and BlackRock. 

For 60 years, the Civil Right Act made it illegal to hire or promote based on race. Companies are in the middle of growing their DE&I efforts, which to some extent is a violation of federal law and the principle of color-blind equality. But DE&I is not about equality. Diversity, Equity & Inclusion is not based on equality, it is based on equity. Whereas equality means providing the same to all, equity means recognizing that we do not all start from the same place and must acknowledge and make adjustments to imbalances. 

Based on this equity and not equality approach, the DE&I programs might come under more scrutiny and challenges. To treat all people equally seems reasonable, but it might not work if the goal is to build a diverse workforce. The debate will undoubtedly continue, but the sense is that the Supreme Court college ruling also will have an impact on American corporations. Equality or not, that is the question.  

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