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Sunday, February 25, 2024
Feb. 25, 2024

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Businesses brace for attack on DEI after Supreme Court dismantles affirmative action

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DALLAS — Universities can no longer consider race when dealing out acceptance letters to higher education hopefuls. Thursday’s Supreme Court decision could set a precedent beyond college campuses — potentially affecting affirmative action’s corporate counterpart: diversity, equity and inclusion.

While the decision doesn’t detail new rules for employers, businesses are watching carefully to see how and if the legal landscape shifts.

These initiatives set out with a mission of making healthier work environments and addressing longtime labor inequities. In recent years, the three-letter acronym has been dragged through a culture war among Republicans and Democrats and made into a growing industry of consultants.

U.S. Equal Employment Opportunity Commission chair Charlotte A. Burrows said the decision does not address employer efforts to foster diverse and inclusive workforces and it remains lawful for employers to implement these programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.

Burrows said the decision turns away from decades of precedent and will undoubtedly hamper efforts to ensure diverse student bodies.

“That’s a problem for our economy because businesses often rely on colleges and universities to provide a diverse pipeline of talent for recruitment and hiring,” Burrows said in a statement.

Ahead of the court decision, dozens of employers, including American Airlines, Match Group, Google and Dell Technologies, warned in a brief to the highest court that without affirmative action they’ll lose access to highly-qualified future workers and business leaders and will struggle to meet diversity hiring goals.

For more than half of employed U.S. adults, focusing on increasing DEI at work is a good thing, according to a new Pew Research Center survey. A fourth are indifferent, and 16% say it’s a bad thing.

Mandy Price is a local authority on the matter. She heads up Kanarys, a Dallas-based tech company that provides organizations with diversity, equity and inclusion data. Since the ruling, Kanarys has partnered with a national labor and employment law firm FordHarrison LLP, to prepare clients for the inevitable pushback against diversity initiatives.

“Now more than ever, it’s important for companies to solidify their commitment … and have comprehensive DEI strategies in place because there will be legal and reputational ramifications for those that do not,” Price said.

While Price noted that college admissions and companies operate under different legal codes — higher education operates under Title 6 whereas workplaces operate under Title 7 — the rules give each other guidance.

“We know that this decision will embolden others to challenge workplace diversity initiatives,” Price said.

Will Hild, the executive director of Consumer Research, a right-wing advocacy group that lobbies against environmental and social governance, said that Thursday’s decision “puts wind in the sails of organizations like ours and others who very much disagree with DEI departments and how they operate.”

Hild said the group is looking at all means to push back on “racially-focused hiring,” whether that be through ad campaigns against certain companies or litigation.

Texas has been at the forefront of dismantling DEI. Gov. Greg Abbott signed a bill earlier this month shuttering diversity offices and programs in higher education, after months of debate on the Senate and House floors. Starting in January 2024, Texas campuses must eliminate DEI offices, mandatory DEI statements and training.

The meat of what these data-driven programs are meant to accomplish in corporate atmospheres gets lost amid the politics, said Natalie Norfus, owner of a DEI consulting firm.

By creating a sense of belonging among employees through DEI initiatives, she said most of her clients are able to begin addressing issues of labor shortages and retention.

“There are so many inequities, especially along race lines, even still today,” Norfus said. “Folks are having experiences on university campuses and in the workplace, where they feel like they don’t belong.”

The industry behind diversity and inclusion has seen an influx of cash since the murder of George Floyd spurred a racial reckoning. More than 1,300 US companies pledged about $340 billion to racial equity initiatives from May 2020 to October 2022, according to McKinsey & Co.

Following Thursday’s decision, Norfus isn’t concerned about the future of her consulting group that started in 2019. She’s even more frustrated.

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“For many reasons, but the largest of which, is that it creates such noise and distraction and an unfair fear for people in marginalized groups.”

Pushback for diversity initiatives hasn’t been limited to individual companies. After the Securities and Exchange Commission approved a Nasdaq rule that mandates companies listed on the exchange have at least two diverse directors, conservative groups sued to invalidate the rule. The groups argued the mandate was unconstitutional. The case is still being decided.

Texas Rep. Carl Tepper, R-Lubbock, filed a house bill Thursday that in part proposes codifying a ban on affirmative action in governmental employment into Texas state law.

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