The Supreme Court Ended Race-Based Affirmative Action in Higher Ed Admissions

How Might the Court's Decision Impact the Workplace, and What Can Organizations Do to Protect Workplace Diversity Programs?

On June 29, 2023, the Supreme Court (the "Court") issued a joint decision in two cases (the Students for Fair Admissions or SFFA cases), finding that affirmative action in admissions in higher education is unconstitutional under the Equal Protection Clause of the Fourteenth Amendment and unlawful under Title VI of the Civil Rights Act of 1964. In so doing, the Court redefined the longstanding legal framework for certain race discrimination claims.

As expected, the decision in the SFFA cases has encouraged and emboldened conservative groups, which have been mounting legal attacks on affirmative action for decades. Edward Blum, the progenitor of the SFFA cases, has already signaled that, "employment is one area that [...] will garner greater attention, not just from me, but from other organizations, other legal policy foundations." In the few months since the SFFA decision, these organizations, along with many conservative states, have sought to expand these challenges to a greater number of diversity initiatives and announced a broad focus on race and gender discrimination in employment programs and in contracting, particularly programs that exclude individuals based on set quotas or preferences for-or aggressively approach numeric goals by-race and/or gender.

At the same time, progressive states and organizations have pushed back by stating their intent to zealously defend lawful diversity, equity, and inclusion (DEI) measures and working to prevent further setbacks. Likewise, on August 15th, the Biden Administration's Departments of Education and Justice issued joint guidance regarding the Court's decision as it pertains to educational institutions only. The Administration's guidance, which does not apply to employment but includes some recommendations that can be adapted to the employment context, is summarized in many articles and is reflected in the analyses and recommendations included in this paper.

We applaud these efforts and join the advocacy community and many others in our disappointment with the Court’s decision. While we remain steadfast in our commitment to equity and justice, as management consultants and advisors, our goal is also to proactively help leaders and organizations recommit to inclusive initiatives and craft them to achieve their stated objectives, while minimizing risks and staying ahead of lawsuits and other organizational and workplace threats.

So, how can organizations comply with new and existing laws (especially as they pertain to the workplace) and prepare for more changes ahead without over- or under-reacting? We believe organizations should ensure-at a minimum-policies, practices, contracts, and communications conform to existing law (e.g., by eliminating quotas or express preferences based on race in most-if not all-circumstances); seek to understand the latest and prior decisions and the many resulting ambiguities and open legal questions (as opposed to settled ones); monitor the evolving landscape and changes in the laws; and continuously review, debate, and update workplace policies, practices, and communications with an understanding of the associated risks in order to make informed decisions.

What exactly did the Supreme Court decide?

The Court's conservative majority held that affirmative action in higher ed admissions was always meant to be temporary in service of racial diversity, but that diversity—including, training future leaders, preparing graduates to thrive in an increasingly pluralistic society, promoting the robust exchange of ideas, fostering innovation and problem-solving, and encouraging respect, empathy, and cross-racial understanding, among other things— was not sufficiently measurable and no longer a compelling enough interest to justify racial preferences. The Court found that the affirmative action programs at issue impermissibly used racial classifications as stereotypes by treating the fact of an applicant's race alone as indication of something meaningful about the applicant's lived experiences or the qualities the applicant could bring to a campus environment, which in turn disadvantaged Asian-American and White applicants. The Court also found that the categories of race and ethnicity the universities used (e.g., Black, Asian, White, etc.), even though they are federally mandated, were too imprecise. Notably, the Court reasoned that, when a "benefit," is "provided to some applicants but not to others," the benefit (in this instance, a spot at a university) is not unlimited; and that allocation of a zero-sum benefit is unlawful, if the allocation is based-even in part-on race.

Critically, the Court held that its decision to now prohibit affirmative action in higher ed admissions was consistent with and applicable to Title VI of the Civil Rights Act of 1964, which prohibits race discrimination in programs or activities that receive federal funds (see more below re: implications for organizations that receive federal funds). The Court did not comment on race-neutral diversity measures (e.g., those that use family income or zip code to prioritize people living in poverty or under-resourced neighborhoods). Such measures remain lawful at this time, provided they are not used as a pretext for giving, or designed to give, preferences to particular racial groups and are carefully designed, implemented, and communicated.

The Court also allowed institutions to consider how race may have affected an applicant's individual circumstances on an individualized basis (e.g., overcoming personal obstacles), but explicitly disallowed preferences for applicants based solely on an applicant's race. Thus, higher education (and presumably other organizations) remain free to consider any quality or characteristic of a student that bears on the institution's admission decision, such as courage, motivation, or determination–even if the student's application ties that characteristic to their lived experience with race—provided that the student is "treated based on his or her experiences as an individual" and "not on the basis of race."

Which organizations are impacted by the Court’s decision?

Because of the specific legal statutes cited by the Court, the decision actually applies beyond admissions in higher education (and higher-ed organizations), to impact any organization that is a state actor (which in limited instances can include a private entity) or receives (or is a sub-recipient of) federal funds. Going forward, such organizations are now expressly prohibited from using race, color, or national origin classifications as a factor to determine to whom to provide a service or benefit (e.g., financial or legal aid) absent highly unusual and very fact-specific circumstances, which would require consultation with legal counsel. All organizations, especially those that receive federal funds, should review their practices and provision of services to determine if there is actual or implied preferential treatment in allocating jobs, services, or contracts based on race, color, or national origin.

Also, the decision and the political movement fueling the lawsuits signal greater scrutiny of additional programs and practices intended to advance diversity and equity, including workplace programs and programs that provide contract preferences in contracts with vendors, contractors, and others. As such, it is all the more important that organizations: ensure they understand, and are in compliance with, preexisting federal, state, and local employment law; understand the risks involved in using particular language, frameworks, and more; and prepare for potential future shifts in the legal landscape.

Which workplace DEI measures are lower risk based on current guidance?

The conservative majority on the Court generally agreed that, "racial discrimination still occurs and the effects of past racial discrimination still persist" to this day. While the Court characterized diversity goals in educational settings as "commendable," it also held that "[r]acial classifications are simply too pernicious to permit." Justice Kavanaugh noted that one "can...act to undo the effects of past discrimination in many permissible ways that do not involve classification by race." The Equal Employment Opportunity Commission (EEOC) Chair reiterated the message in her statement: "the decision in [the SFFA cases] 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."

PEG emphasizes the importance of organizations continuing to pursue all lawful efforts to reduce bias in hiring, promotion, and contracting decisions. DEI measures, however, should be viewed as having a risk continuum. Those programs that foster overall greater inclusion, expand opportunities, provide appropriate training, and do not carry an employment or contract benefit, typically carry less risk. While fully aspirational workplace diversity goals remain lawful at the current time —particularly when tied to specific industries or roles with documented proof of barriers, and when not tied to bonuses, incentives, reviews, or over aggressive statements or timeframes — decisions cannot be based on the desire to reach a specific numeric goal. Employers should be clear that initiatives are intended to foster greater overall diversity, equity, and inclusion, and not to encourage decisions based on protected characteristics.

Provided that the measures are formulated, implemented, documented, and communicated appropriately, and not intended or used as a stand-in or proxy for race, consider the following:

Removing unnecessary barriers. Consider eliminating job requirements or preferences for skills that are not necessary for a role or promotion and that reduce opportunities for others who have been foreclosed from such advantages (e.g., a college or graduate degree unnecessary for the role, no record of arrest or conviction, certain tests or preferences for graduates of a particular school). Consider implementing family-friendly programs.
Expanding outreach and applicant pool. Consider posting all jobs, limiting reliance on internal or other limited referral sources, broadening outreach to underserved communities, expanding outreach and the applicant source pool to diverse colleges and candidates, and revising job descriptions and listings to reflect an inclusive culture (such as by including the EEOC's statement on nondiscrimination). Employers also may want to consult the Department of Labor’s referral database for federal contractors and subcontractors to use to find qualified workers as part of their equal employment opportunity (EEO) efforts. Additional specific recommendations from the letter and guidance the Biden Administration recently issued include:
- Support those from disadvantaged backgrounds, regardless of race, who are attending or have graduated from community college.
- Take active steps to ensure to connect with a broad range of prospective students—including those who might otherwise not learn about educational programs or envision themselves as potential candidates for admission.
- Focus on geographic location or other race-neutral characteristics (e.g., low-performing schools or schools with high dropout rates, large percentages of students receiving free or reduced-price lunch, or historically low numbers of graduates being admitted to the institution).
- DO NOT provide targeted groups of prospective students preferences in the admissions process; DO ensure all students enjoy the same opportunity to apply and compete for admission.
Reviewing and expanding criteria for the best candidate. Consider organizational goals and services and unique additions staff can make to organizational goals (e.g., hire those who have experienced food insecurity or domestic violence for roles and services where such experience is especially relevant) as well as factors such as socioeconomic considerations, family or community wealth and poverty levels, first-generation college graduates or related first-in-family programs, and obstacles candidates have overcome (e.g., providing financial support or other family care). Consider defining eligibility to participate in programming based on race-neutral or non-race criteria. For example, under-representation might mean different things in different areas of the countries, in different industries, and/or for different roles. Consider reviewing policies to ensure they identify and reward those attributes that an organization most values, such as hard work, achievement, intellectual curiosity, potential, and determination.
- However, ensure questions asked are similar for all candidates, and exercise care in complying with federal, state, or other privacy laws that prohibit certain inquiries, including not specifically requesting certain information.
Focusing on Inclusion, Belonging, Retention. Consider additional means of fostering inclusivity and belonging, such as facilitating adequate mentorship, providing sufficient resources for those of all cultural backgrounds to succeed, ensuring reasonable accessibility and accommodations are available, implementing flexible work arrangements as appropriate, improving communications and transparency, and other means to improve current job satisfaction and working conditions. Ensure that all individuals-including persons of color-know that all workers are and will be welcome. Focus on fostering a sense of belonging and support through an office of diversity and other resources, if these support services are available to all. An institution may also offer support clubs, activities, and affinity groups—including those that have a race-related theme—to ensure there are spaces for staff to celebrate shared identities, interests, and experiences and such opportunities are appropriately formulated and communicated, so long as the offerings are open to all regardless of race. Consider greater transparency in resource information for employees, such as providing information on how to request to form an affinity group or related initiative. These efforts should be available to all employees and not based on protected traits.
Providing training. Continue appropriate diversity, cultural agility, respectful communications, and other training (including that required by applicable state, local, or other law). Consider providing training to recruiters, supervisors, and others on inclusive hiring practices, standardized questions for interviews, objective and unbiased employment decisions, and effective evaluation techniques.
Starting earlier. Consider investing in programs in which career counselors or mentors reach out to underserved communities, those without degrees, or first-generation college students. Help connect people of all backgrounds with the resources they need to succeed prior to employment.

What workplace practices have always been prohibited?

Even before the SFFA decision, federal law (and many state and local laws — which we do not undertake to cover here) prohibited certain employment practices that have been used in some workplace DEI programs. In most circumstances, basing a workplace employment decision on a protected trait such as race, color, religion, sex, and national origin is (and always was) unlawful. As just a few examples, the following practices should be eliminated:

Using race, gender, or certain other protected traits as a "plus" factor in employment decisions; or using racial or gender hiring or promotion quotas (or anything that looks like a quota, such as a goal that might be deemed especially aggressive)
Indicating a race or gender preference in job postings or in other communications
Basing hiring decisions on stereotypes or assumptions about a person's race, national origin, or sex (e.g., assumptions that a Latinx candidate can speak Spanish, a non-Latinx candidate cannot speak Spanish, a woman is singularly qualified to address domestic violence)
Utilizing job requirements or other criteria that serve as a proxy for race, national origin, or sex (e.g., language fluency requirements when language skills are unnecessary for the position)
Providing unequal pay or other compensation or benefits on the basis of race or sex (e.g., providing financial incentives to attract only diverse candidates)
Establishing race- or gender-specific training programs to prepare employees for advancement (e.g., a leadership program only for Black or female employees)

Additionally, to the extent workplace programs impact non-employee workers, federal law prohibits racial discrimination in making and enforcing contracts (e.g., with independent contractors; outside vendors like web designers, graphic designers, and caterers; and outside suppliers like printers or supply or repair service providers). Keep in mind that the legal definition of a contract is much broader than a formal, signed, or even written, document. There are many mounting challenges to all forms of contract preferences, and courts already have found some of contract preferences and/or exclusions to be unlawful.

What workplace practices are ambiguous/undecided, and likely to appear before the Court in future terms?

Lawsuits challenging race-neutral practices designed or perceived to use other factors as proxies for race are increasing. In the aftermath of the SFFA decision, SFFA issued a statement that it will be "closely monitoring potential changes in admissions procedures" and "intend[s] to initiate litigation" if SFFA believes universities are using race-neutral criteria as an unlawful "proxy" or substitute for race. The Pacific Legal Foundation ("PLF") has stated that race-neutral measures with race-balancing intent are "the next frontier" in the battle. PLF already has sued a selective high school in Virginia for discriminating against Asian students, allegedly by using race-neutral policies to increase the diversity of enrolled students and reduce Asian enrollment. The high school's race-neutral factors include, for example, admitting a proportional number of seats to each school division, considering socioeconomic factors, and eliminating barriers such as costs for application. The trial court held that the race-neutral factors were in fact a proxy for racial discrimination. The appellate court (in a 2-1 decision) reversed the trial court and found for the school. The Pacific Legal Foundation filed a petition seeking Supreme Court review on August 21.

Lawsuits seeking to hamper diversity initiatives by invoking existing workplace non-discrimination laws also are ongoing, with conservative organizations mounting more. These include challenges to diversity scholarships and fellowships, supplier diversity initiatives, race-restricted diversity grants (including to small businesses), diversity mentorship programs, diversity leadership training programs, and meeting aspirational numerical- or percentage-based diversity goals for hiring or promotion.

Notably, Andrea R. Lucas, a Trump-appointed EEOC Commissioner (who is authorized to file legal actions), wrote an opinion piece in the wake of the SFFA cases describing the decision as the "rejection of diversity, nebulous ‘equity’ interests, or societal discrimination as justifying actions motivated — even in part — by race, sex, or other protected characteristics." She identified two pending cases before the Supreme Court that may broaden the ability to attack DEI measures as well as additional practices conservatives (and potentially the EEOC) plan to challenge (including some measures that violate existing non-discrimination laws) such as:

“Race-restricted access to mentoring, sponsorship, or training programs;”
“Requiring a set number of candidates from a particular background to be interviewed for a position;”
“Tying compensation to the company achieving certain demographic goals;”
“Race-restricted internship programs or accelerated interview process;” and,
“Diversity ‘scholarships”

Final thoughts

Continuing workplace diversity efforts, within legal confines and in a manner that mitigates organizational risk, is vital to maintain and build on progress made to meet business needs and to our future. With the legal landscape in flux, growing court challenges, and little court guidance on workplace programs, it has grown more difficult for employers to navigate structuring such programs consistent with current law. Employers should consider how best to stay apprised of and respond to existing laws and new developments that impact workplace DEI initiatives. As to other initial recommended steps, in addition to those identified above:

Ensure compliance with existing law

As detailed above, certain employment practices have long been prohibited by federal law. Conservative activist groups and governments-immediately-are targeting race-based quotas, set-asides, preferences, or even plus-factor considerations in any government or federally-funded programs as well as in employment and vendor-supplier and other contracts. Consider reviewing and changing any such practices or programs. Likewise, consider reviewing and changing websites or communications that may result in a government inquiry or reverse discrimination claim. As most major news services have recently publicized, some state Attorneys General already have been sending letters of warning to Fortune 100 and other companies that the above-described actions, or encouragement of or participation in such conduct, is unlawful.

Regardless of federal coverage, it is crucial for your organization to consider ALL laws for the jurisdiction in question, including state, local and international law where applicable. In some instances, such laws may be broader, more restrictive, or even contradictory in their requirements.

Assess your organization's risk tolerance

In developing workplace programs, each employer and organization will have a different level of risk tolerance when it comes to legal claims. After the decisions in the SFFA cases, politically and socially conservative organizations are mounting yet more challenges to various DEI practices in employment and supplier diversity programs, small business grants, and race-restricted internship and scholarship programs, among other matters, to tee up potential tests. We also have seen and expect to continue to see an uptick in filings of "reverse" discrimination claims. Consider assessing what amount of risk your organization is willing to accept as one factor in determining what diversity initiatives to pursue. And remember that, even in risk-averse settings, certain diversity initiatives are required (e.g., various forms of anti-harassment training in many states and localities) and some others may be pursued with minimal or no risk.

Assess goals and utilize new tools to achieve diversity

The Court's decision offers an opportunity for employers to think more deeply about and better articulate organizational goals, test and tie those goals to diversity measures, and explore new avenues to improve diversity results. One example of an empirically successful tool in building diversity is the socioeconomic disadvantage scale (sometimes called the "adversity score") that the UC Davis Medical School developed. The scale accounts for factors such as family income, parental education levels, and whether applicants financially support their nuclear family. While zealous opponents to diversity efforts may still challenge these tools, such measures remain lawful at the current time — provided that they do not intend for racial diversity, preferences, or exclusion to be the end goal (e.g., do not make a job qualification residence within zip codes that are 90 % Black and Latinx, do not examine data to determine which race-neutral factors will achieve the most racial diversity and select those factors).

Review programs, practices, trainings, and communications for vulnerabilities

There are certain commonplace workplace DEI practices that are under renewed scrutiny, either based on claims that such practices are unlawful or for use as evidence to support a claim of intentional discrimination. With review, some small tweaks, careful implementation, and proper communication, these practices should present little risk. For example:

Affinity Groups (sometimes known as employee resource groups), as currently formulated in some diversity initiatives, may be challenged on a number of bases. To protect against these challenges, among other possible steps, employers should not prohibit or dissuade employees from joining any affinity group of their choosing; should make available affinity groups open to those of all backgrounds; should ensure that complaint reporting, harassment, and discrimination policies apply equally to such groups; and should consider reviewing and changing classifications and language used in such programs, in some cases.
DEI Mission Statements should be reviewed to ensure that there is no implication that certain candidates or employees receive preferential treatment. For example, a DEI mission statement, announcing that the company is committed to gender equality and will be ensuring that some specific percentage of all its new hires are women, would be viewed as evidence of discriminatory intent under many laws. Organizations should tweak DEI, equal opportunity, and mission statements so that it is clear all employees are welcome, without regard to protected traits.
Any organizational goals based on protected traits should be reviewed. While such goals-when purely aspirational and formulated correctly-currently remain lawful, the goals should not be a disguised quota or preference and should make clear that there is no such preference. Federal contractors and subcontractors subject to Office of Federal Contractor Compliance Programs jurisdiction are required to determine if they should establish goals as required by Executive Order 11246 and these requirements are not impacted by SFFA. Also, if an organization is setting goals or identifying a problem to address with specific programming, we recommend that it first conduct appropriate privileged analyses (e.g., representation, benchmarking, selections, and compensation analyses) using appropriate methodologies to garner accurate results.
Mandatory Diversity Training Programs have been the subject of, or used as evidence in, reverse-discrimination lawsuits, including allegations that the programs have amounted to race-based harassment. For example, a training at a well-known multinational employer was challenged as race-based harassment, because it advised employees to "try to be less white" and that "[to] be less white is to" "be less arrogant," "be less ignorant," and "be more humble." Other trainings that have divided or classified employees into racial groups have been challenged and rejected. Modify language and methods used in training so that all groups (including the majority groups) are not stereotyped or denigrated. Eliminate training or other practices that segregate employees based on race.
Data collection practices and information are being requested in discovery in discrimination claims. For now, employers still can track the diversity of their employees and leaders across all intersections (and, in some instances, are required by law to do so) — but cannot use the data to drive employment decisions (e.g., hiring targets, hiring, promotion). Please review data collection practices with a legal expert to confirm consistency with applicable EEO, privacy and data collection laws.

Please find additional resources here. Check back for updates.

Note: This brief does not constitute and is not intended to constitute legal advice.

Linda Goldman is an employment lawyer, workplace investigator, and DEI expert, among other specialty areas, with Ogletree Deakins. She also assists PEG with DEI and HR consulting. She previously was a Title IX/DEI officer at UCLA, an employment lawyer with Munger, Tolles & Olson, an employment law professor at Loyola Law School, and a federal law clerk.