SCOTUS Affirmative Action Decision and the Future of DEI

Welcome to SMB Matters. I am Annmarie Liermann, Senior Counsel for Employment at TriNet, where I’m an expert in compliance. This podcast series takes a close look at the latest news and trends on a variety of topics related to running a successful small and medium-size business.

Today, I’ll be talking about the decisions by the Supreme Court to strike down affirmative action programs at Harvard and the University of North Carolina, and how they may relate to running a business. The cases were decided under Title VI of the Civil Rights Act of 1964.

Title VI prohibits discrimination based on race, color or national origin in programs or activities that receive federal financial assistance. It applies to most institutions of higher education because all but a small percent receive federal money in the form of research grants and federal student aid. In the just-decided Harvard and UNC cases, the court held that these universities could not give an applicant for admission preferential treatment based on race, even if race was just one factor considered.

In contrast, however, private employers are governed by Title VII of the Civil Rights Act. Like Title VI, Title VII prohibits discrimination based on race, color, religion, sex and national origin. However, Title VII applies specifically to employment—and in these cases the Supreme Court did not decide anything about Title VII or employment.

Still, some employers may justifiably be concerned about whether the court might do something similar in the future about Title VII and employment practices. And they may wonder about efforts to increase diversity in their workforce and if DE&I initiatives and programs are still allowed after the Supreme Court’s rulings.

The answer is yes. Efforts to increase workforce diversity including DE&I programs are still allowed as long as those efforts comply with Title VII—that is, without using a protected status as a factor in employment decisions. And that has always been the law under Title VII.

However, if opponents of DE&I were to try to get a law passed to prohibit DE&I efforts, that would present a very different situation. And, in case you think this is just a theoretical discussion, there are already examples of state laws currently in place that are intended to prohibit various types of DE&I-related efforts.

For example, Florida enacted the Stop WOKE Act in 2022 which prohibited employers from requiring Florida-based workers to attend certain types of DE&I training, such as training on critical race theory. In that case, however, a court declared the part of the law that applied to workplaces unconstitutional. So, it’s a good practice to stay on top of what is happening with the law in the places where your organization has employees.

Just as important, make sure your DE&I efforts are conceived and carried out properly. The best laid plans can lead to major problems if they are not well-founded or not executed or communicated correctly inside your organization. By way of example, any programs or practices regarding hiring, firing, promotions, training or compensation that result in preferences to employees based on their protected characteristics, or that result in quotas or set asides, are likely unlawful under Title VII and will expose employers to risk of legal action.

Therefore, you should make sure:

First, that your HR teams—including talent acquisition and DE&I program managers—understand what DE&I can and cannot do and can identify unlawful employment practices under Title VII.

Second, that any communications, verbal and written, regarding your DE&I efforts clearly convey that your organization understands that DE&I is not about preferences, quotas or set asides for individuals in protected or historically underrepresented groups.

And third, that managers understand that hiring and promotion decisions are to be based on skills, qualifications, experience and merit, without regard to an employee or applicant’s race, religion, sex, national origin or color.

Bottom line: Make sure that all decisions having to do with terms and conditions of employment are based on business-related factors and merit.

If you do that, your DE&I efforts should be good to go—but you still need to be aware of any existing or proposed laws that may impact your DE&I programs or practices.

Thank you for listening to SMB Matters. If you enjoyed this show, please leave a review on Apple Podcasts, Spotify or wherever you listen to your podcasts. And please share it with a colleague or make sure to subscribe to our newsletter at TriNet.com/Insights. Also, we'd love to hear from you, so please feel free to drop us a line at SMBMatters@TriNet.com. SMB Matters by TriNet is committed to providing small and medium-size businesses with timely and relevant insights.

Legal Disclaimer:

This podcast is for educational purposes only. With decades of experience supporting small and medium-size businesses, TriNet has unique insight into HR best practices for businesses. TriNet does not provide legal, tax or accounting advice. The materials in this podcast and the options and opinions expressed herein may not apply to your company or scenario, so you should consult with your own advisors on how best to proceed. Reproduction in part or in whole is not permitted without express written authorization from TriNet.