Fearless Fund, a venture capital firm located in Atlanta, Georgia, is offering grants of up to $20,000 specifically to smaller businesses owned by black women. These grants are intended to support enterprises that have been historically disadvantaged. However, Fearless Fund recently faced a lawsuit alleging discrimination because white and non-black women are ineligible for the grants. This lawsuit, led by US conservative legal strategist Edward Blum, resulted in a federal appeals court panel temporarily blocking Fearless Fund from selecting grant recipients or issuing funds.
This lawsuit can be seen as part of a larger pattern of challenges to diversity, equity, and inclusion (DEI) programs in the workplace, following the Supreme Court ruling curtailing racially conscious admissions at US colleges. Recruitment practices at major law firms are already coming under scrutiny. For women, especially black women, these legal challenges pose a significant concern, as companies may become more cautious and avoid anything that could potentially cause a legal problem.
DEI programs have offered the promise of greater workplace equality for women, but progress has been slow. David Lopez, a law professor at Rutgers University and former general counsel at the Equal Employment Opportunity Commission, believes that progress towards diversity in leadership positions could be halted due to fear of litigation. Tina Opie, a management professor at Babson College, shares this concern and believes that companies will avoid anything that might be seen as problematic.
While the legal challenges to DEI programs have primarily focused on race, all women should be concerned, according to experts in workplace issues. Khiara Bridges, a professor at UC Berkeley law school, warns that if companies become risk-averse, it will harm all groups that have benefited from DEI initiatives.
Edward Blum’s Supreme Court victory seems to have emboldened critics of DEI programs, even though the ruling specifically applied to university admissions and not employers. The Equal Employment Opportunity Commission has stated that corporate diversity efforts remain lawful, but attorneys-general in Republican-led states have underscored employers’ obligations to refrain from racial discrimination under DEI labels or otherwise.
Individual plaintiffs have already picked up on this theme, including a white former managing director at Morgan Stanley who filed a race-discrimination claim alleging he was replaced by a black woman to meet diversity targets. The outcome of these legal challenges could have dire consequences for women and particularly black women, who are underrepresented in higher-paid and higher-status jobs.
Since the Supreme Court ruling, corporate leaders have become quieter about DEI programs to avoid attention. Chandra Robinson, who leads the HR practice at Gartner’s research and advisory unit, believes companies need to evaluate what has not changed and consider revising labels to focus on compliance with Title VII, the part of the Civil Rights Act that applies to employers.
While the legal challenges to DEI programs are concerning, there is still potential for broad appeal and support for these initiatives. Employers can take action to prevent their DEI efforts from losing momentum, including revising labels and keeping a perspective on the long-term benefits of diversity and inclusion.
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