In the wake of the Supreme Court’s June 29, 2023 decision finding that Harvard and the University of North Carolina’s race-conscious college admissions selection processes were unconstitutional, we have seen commentary from lawmakers, attorneys general, and government agencies on how that decision impacts (or does not impact) employers’ continued use of diversity, equity and inclusion (“DEI”) programs. This commentary includes a letter from 13 state attorneys general sent on July 13, 2023 to the CEOs of Fortune 100 companies warning, “If your company previously resorted to racial preferences or naked quotas to offset its bigotry, that discriminatory path is now definitively closed.”  Employers need to be aware of how the decision does and, more importantly, does not impact their recruitment and hiring practices.

In Students for Fair Admissions, Inc. v. President & Fellows of Harvard case, the Supreme Court held that Harvard and the University of North Carolina’s race-conscious admissions programs violated the Equal Protection Clause of the Fourteenth Amendment. Specifically, the Court found that because the programs lacked sufficiently focused and measurable objectives warranting the use of race, unavoidably employed race in a negative manner, involved racial stereotyping, and lacked meaningful endpoints, the admissions programs could not be reconciled with the guarantees of the Equal Protection Clause. The full opinion can be found here. The Court did, however, note that “nothing prohibits universities from considering an applicant’s discussion of how race affected the applicant’s life, so long as that discussion is concretely tied to a quality of character or unique ability that the particular applicant can contribute to the university.”

The decision did not address in what manner employers may consider race in the context of recruiting or hiring employees. Title VII of the Civil Rights Act of 1964 (“Title VII”), which prohibits racial discrimination in hiring, or state or local equivalents to Title VII, were not statutes at issue in this case.  These laws still apply in the same way they did before the Supreme Court's decision, as do other statutes requiring that federal contractors engage in affirmative action (which, importantly, does not require considering race in hiring decisions).

On the same date that the Court issued its decision, EEOC Chair Charlotte A. Burrows issued a statement reaffirming the applicability of Title VII and supporting employers in their diversity efforts. Burrows commented that the decision “does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”

Subsequently, on July 13, 2023, 13 state attorneys general (including Indiana’s attorney general), sent a letter to the CEOs of Fortune 100 companies that also discussed the continued applicability of Title VII and similar laws prohibiting discrimination in employment. The letter stated that the signing AGs intended “to remind” the companies of their “obligations under federal and state law to refrain from discriminating on the basis of race, whether under the label of ‘diversity, equity, and inclusion’ or otherwise.” The letter discussed the recent Supreme Court decision, noting that the Court “powerfully reinforced the principle that all racial discrimination, no matter the motivation, is invidious and unlawful.”  “Let there be no confusion,” the letter states, the principles from the Supreme Court’s recent decision “apply equally to Title VII and other laws restricting race-based discrimination in employment and contracting.”

The letter went on to opine (without providing factual support) that racial discrimination is common among companies, noting that major companies have adopted illegal race-based initiatives which include: (a) racial quotas and preferences in hiring, recruiting, retention, promotion, and advancement, and (b) race-based contracting practices, such as racial preferences and quotas in selecting suppliers, showing preferential treatment to certain customers, and pressuring contractors to adopt racially discriminatory quotas and preferences. The attorneys general state that such practices violate Title VII and 42 U.S.C. § 1981, which prohibits race discrimination in contracting. The letter’s concluding remarks note that the Supreme Court’s recent decision should place every employer and contractor on notice of the illegality of racial quotas and race-based preferences in employment and contracting practices.

The letter has received criticism, including commentary pointing out that there is nothing in the Supreme Court’s decision that suggests that workplace DEI programs are unlawful and that the decision does not concern Title VII, which governs employment discrimination and DEI initiatives. [1] The Democratic Attorneys General Association has also issued a response, noting that while they agree companies should face legal consequences for “unlawful” discrimination, the letter had made baseless assertions that any attempts to address racial disparity are by their very nature unlawful.

Notably, much of the commentary discusses the use of “DEI programs” generally without necessarily discussing the intricacies of those programs. But differences matter. Setting racial quotas is one thing. Increasing the diversity of a companies’ candidate pool through outreach and making hiring decisions based on factors other than race is another. [2]  

What we know is that the Supreme Court’s June 29, 2023 decision did not hold that employer’s DEI programs are conclusively unlawful. Accordingly, as to whether a DEI program is problematic under Title VII (or its state or local law equivalents), the answer is: it depends. In other words, a decision to throw DEI programs out the door should be met with scrutiny.  Rather, employers with such programs should re-evaluate their programs to ensure that they still meet the standards of Title VII. 

We will be monitoring how, if at all, the Supreme Court’s decision impacts employment hiring and recruiting in the future, whether that be in the form of increased legal challenges to DEI initiatives or in how civil rights agencies or courts are interpreting the law on this issue. In the meantime, if you have questions about this topic, please contact Kayla Ernst, Tami Earnhart, or any member of Ice Miller’s Workplace Solutions team.

[1] Atkinson, Khorri, Republican AGs Have Tough Legal Road Against Corporate Diversity, BLOOMBERG LAW, July 20, 2023.
[2] This is the essence of mandatory federal contractor affirmative action programs in employment.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.