Last month, the Supreme Court of the United States (SCOTUS) issued a ruling ending affirmative action in college admissions. Many have wondered how this ruling may affect DEI programs in the private sector. Earlier this month, thirteen Attorneys General sent a letter to the CEOs of Fortune 100 companies warning of potential legal consequences over race-based employment and diversity policies. A memo from Gibson Dunn breaks down the contents of the letter.
In their letter, the group of Attorneys General stated their view that “racial discrimination in employment and contracting is all too common among Fortune 100 companies and other large businesses.” They warned that if a company “previously resorted to racial preferences or naked quotas to offset its bigotry, that discriminatory path is now definitively closed” as a result of the Supreme Court’s decision in SFFA v. Harvard.
According to the memo, the letter goes on to list examples of allegedly unlawful activity including the use of “explicit racial hiring quotas” and criticizes several companies for their 2020 commitments to racial justice. The memo points out that the AGs view of DEI programs may be at odds with certain federal and state government contracting requirements which the letter does not address.
Given the court’s ruling on affirmative action, future rulings could undermine the legal frameworks currently protecting company DEI programs. The memo urges companies to evaluate their current DEI programs and assess if SCOTUS’s decision may introduce them to additional scrutiny or litigation risks.