DEI has been under fire recently with the Supreme Court’s ruling against affirmative action in university admissions and Florida’s suite of anti-DEI bills. Companies are trying to understand business implications of these DEI restrictions. Luckily, a recent win is on the books, as the US Supreme Court decided that Starbucks’ decision to adopt DEI initiatives is within the Board’s business judgment. Last year, the National Center for Public Policy Research (NCPPR) filed a complaint against Starbucks and its officers and directors, claiming their DEI policies violated state and federal civil rights laws. The complaint alleged that this “endangered Starbucks and the interests of all its shareholders.” The Court dismissed the case with scathing remarks. Check out this synopsis of the decision and the conclusion of the Court:
“…This Complaint has no business being before this Court and resembles nothing more than a political platform. Whether DEI and ESG initiatives are good for addressing long simmering inequalities in American society is up for the political branches to decide. If Plaintiff remains so concerned with Starbucks’ DEI and ESG initiatives and programs, the American version of capitalism allows them to freely reallocate their capital elsewhere.”
With company leaders on edge about this topic, it’s refreshing to see a court affirm a company’s right to exercise its DEI commitment as a business matter within the scope of operating decisions. The message to company boards is that there is a place for DEI in their businesses. For a robust discussion on legal and business implications of the Supreme Court ruling against affirmative action, check out the joint PracticalESG.com and TheCorporateCounsel.net webcast, “Corporate DEI Programs After Students for Fair Admissions v. Harvard” as in-house practitioners discuss top-of-mind issues for business leaders wanting to make progress on DEI.
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