Supreme Court will make it harder to hire a diverse team

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Today, the Supreme Court is hearing two cases that are expected to overturn long-standing precedent and reject diversity as a justification for considering race in college admissions. One case involves Harvard University and the other the University of North Carolina. The decision announces not only major changes for higher education, but also for private companies.

The most obvious short-term consequence for employers is the hiring of newbies. Elite employers recruit from elite universities. If these universities become less racially diverse, the companies that recruit heavily there — especially those in tech, finance, law, accounting, and consulting — could do so as well.

However, the most serious challenges for employers run much deeper. The fundamental problem will be that the diversity goals trumpeted by big business will no longer correspond to a goal that has been blessed by the courts. On the contrary, racial diversity will be a goal that the Supreme Court rejected. This rejection will initiate a process of political and cultural conflict that companies will not be able to avoid.

As the transition unfolds, whether gradually or quickly, every diversity officer in the country will need a new job title — and possibly a new position. The pursuit of diversity, equity and inclusion will require rebranding and reinvention. There are also implications for the environmental, social and governance movement, as the S in ESG has come to include diversity in the workplace.

To see how and why this will happen, it is worth starting by looking at the legal technical aspects of both cases. In the case involving the University of North Carolina, the Supreme Court will likely say that under the Constitution, the meaning of “equal protection of the laws” prohibits any government entity from considering racial diversity. In the Harvard case, the court can be expected to rule that the anti-discrimination law that covers private universities receiving federal funding – Title VI of the Civil Rights Act of 1964 – also prohibits any form of discrimination. race-based affirmative action or the express pursuit of racial diversity.

Workplace discrimination is governed by Title VII, a different section of the Civil Rights Act. So workplace diversity and workplace affirmative action won’t technically be before the courts in the UNC and Harvard cases.

But that should be no comfort to employers hoping to stay out of the fray.

The language of Title VI, the discrimination law that will be at issue in the Harvard case, is similar to the language of Title VII, the employment discrimination law. If and when the court decides that the meaning of Title VI follows the meaning of the Constitution’s Equal Protection Clause, excluding consideration of racial diversity in admissions, it would make sense for the courts to deal with the Title VII language as having a similar effect in the workplace.

In a 2020 decision, Bostock v. Clayton County, Judge Neil Gorsuch wrote for the court that Title VII should be interpreted as prohibiting discrimination based on sexual orientation or transgender status. The Liberals naturally embraced this progressive outcome. But as some scholars noted at the time, the literalism of the Bostock decision resonates with the idea of ​​banning diversity in higher education: if an employer considering sexual orientation or gender would count as discrimination “because of sex”, then taking everything into account race would arguably count as discrimination “based on race”.

It follows that it is very likely that a majority of the Supreme Court will find – eventually – that Title VII prohibits the use of racial diversity as a legal objective in the workplace. Even before this issue goes to the Supreme Court, conservative-leaning lower courts will likely conclude that the Harvard-related ruling also sets a precedent for private employers — prohibiting the pursuit of racial and sexual diversity in hiring, promotion or any other employment practice.

The only legal counter-argument comes from a 1979 ruling on private employer affirmative action written by Liberal Justice William Brennan. In it, the court held that Title VI (Anti-Discrimination by Federally Funded Entities like Universities) and Title VII (Anti-Discrimination in Employment) should not be interpreted in the same way. . Although this case is still on the books, few court watchers today would expect the current conservative majority to do anything but ignore or quash it.

The result is that once the court overturns affirmative action in higher education, an employer who uses affirmative action to seek diversity within the meaning of any class protected by Title VII of the Anti-Discrimination Act in the workplace – which includes race, gender, religion and national origin – will run the risk of being held liable for unlawful discrimination.

Of course, many companies that trumpet workplace diversity as a goal fail to recognize consideration of racial diversity in their hiring decisions. But if you were the general counsel of such a company, your first advice to your CEO in the wake of the Supreme Court’s affirmative action decision would be to reconsider even mentioning racial diversity as a corporate strategic goal. company.

The same conservative activists who have been suing universities for years will gladly sue corporations. And their goal has never been simply to end affirmative action, but to strike a blow at the broader political and social struggle around the goal of diversity.

They seem to have the public on their side. A 2022 Pew study found that 74% of Americans think race and gender shouldn’t be a factor in admissions. The majority of whites, blacks, Latinos and Asian Americans agree. Therefore, the court’s decision is unlikely to trigger a broad public reaction in the manner of the Dobbs decision, which overturned Roe v. Wade and allowed states to ban abortion — which most Americans think is legal.

In some circles, however, there will be serious backlash against the court’s opinion. The ideal of diversity is simply too deeply rooted for progressive CEOs to take it off their agenda. Many companies have come to believe, or at least profess, that more diverse companies perform better financially, even if they themselves make only partial progress on diversity.

A potential intermediate option for companies would be to try to maintain the ideal of diversity while avoiding any concrete conduct that could be legally interpreted as using racial or sexual diversity as a hiring and promotion objective.

The Equal Employment Opportunity Commission website currently defines “workforce diversity” as “a business management concept whereby employers voluntarily promote a workplace inclusive”. Under this definition, diversity could, to some extent, be permitted as a separate concept from specific hiring decisions. In practice, however, it seems unlikely that companies – in the long run – will double down on diversity once the concept has been rejected by the Supreme Court.

The most likely outcome, I think, is that companies will start moving away from rhetoric that emphasizes the concept of diversity – as quickly and quietly as possible.

Consider the goal of greater representation of women on boards and in leadership and partnership positions. In 2018, California went so far as to pass a law requiring representation of women on corporate boards, though a state court judge struck down the law in May 2022. Even voluntary efforts in this meaning will now become legally suspect if expressed in terms of numerical targets.

Or consider policies that require interviewing non-white or female applicants for jobs, like the NFL’s Rooney Rule. Such policies could well be struck down in court as illegally giving an employment advantage to their beneficiaries on the basis of race and gender.

As for ESG, an anti-diversity Supreme Court ruling would come at what is already a potential inflection point. ESG is currently under attack by Republican state legislatures. So far, conservative activism has mainly focused on the environmental component. But the social component will now also be attacked.

Ultimately, once the Supreme Court rejects diversity in higher education, it will gradually become increasingly difficult for employers to invoke it as a key corporate value. The lawsuits or the fear of the lawsuits will be one of the engines of a possible cultural transformation. Conservative activism will be another.

The process of change will not be simple or immediate. Diversity values ​​have strong advocates. Companies will find themselves in the increasingly familiar territory of being caught between two sides in a culture war. Ultimately, however, the Supreme Court will make it difficult to uphold the ideal of diversity in the C-suite.

More from this writer at Bloomberg Opinion:

• The Supreme Court will end the era of academic diversity: Noah Feldman

• Supreme Court “Originalists” Are Flying Under a False Flag: Noah Feldman

• The Supreme Court has a bad surprise for companies: Noah Feldman

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Noah Feldman is a Bloomberg Opinion columnist. A professor of law at Harvard University, he is the author, most recently, of “The Broken Constitution: Lincoln, Slavery and the Refounding of America”.

More stories like this are available at bloomberg.com/opinion

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