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Lawyers and conservative activists are cautioning that US companies’ diversity initiatives may face legal challenges in the wake of the Supreme Court’s ruling against affirmative action in university admission programmes.
After years of opposing affirmative action in college admissions, opponents have now set their sights on companies, potentially pursuing legal action and employing social media pressure campaigns against diversity-driven hiring programmes, amid a newly conservative Supreme Court majority.
Critics who view corporate diversity, equity, and inclusion (DEI) efforts as part of a distracting “woke capitalism” agenda quickly embraced the Supreme Court’s ruling on the cases against the University of North Carolina and Harvard University. The ruling, which deemed the consideration of race in admissions processes unconstitutional, has raised concerns among business groups about the future of their DEI initiatives.
“The days of racial discrimination in hiring, especially through these DEI programmes, are numbered,” said Will Hild of Consumers Research, a conservative advocacy group, predicting a wave of litigation as lawyers on a no-win, no-fee basis see higher chances of success.
Neal Katyal, a partner at Hogan Lovells and former US acting solicitor general, also anticipated “fights in the corporate setting” as a result of the Supreme Court’s ruling.
The Public Equity Group, a network of consultants advising companies, noted that while US law already prohibits the use of racial quotas and race-based evaluations for employment, the Supreme Court’s legal reasoning in the college cases could be applied to ending companies’ use of race in training, leadership, and mentorship programmes aimed at addressing underrepresentation.
BSR, which advises companies on social responsibilities, warned that the ruling poses a significant risk to long-term corporate economic success and could undermine decades of efforts to create more inclusive workplaces.
In a submission to the court, companies including Apple, Johnson & Johnson, and Procter & Gamble argued that racial diversity is associated with increased sales, profits, and innovation, emphasising the importance of attracting a racially diverse workforce in serving diverse consumers.
Lawyers and business advisors anticipate an increase in legal claims alleging “reverse discrimination” as a consequence of the Supreme Court’s ruling, particularly in hiring and promotion decisions. Companies are expected to revise their diversity programmes accordingly.
America First Legal, led by a former aide to Donald Trump, has already filed complaints alleging race-based discriminatory hiring practices at companies such as BlackRock and Starbucks.
Despite the ruling’s potential impact, Grace Speights, a partner at Morgan Lewis, believes it will take time for its consequences to manifest as lower courts establish how the Supreme Court’s analysis applies in other contexts. Nevertheless, organisations should examine their employment strategies and minimise legal and reputational risks. However, pressure from employee resource groups may prevent employers from completely abandoning their diversity efforts.
Leon Prieto, an Academy of Management scholar, emphasised the need for corporations to move beyond affirmative action and pursue justice beyond legal requirements. Business leaders, such as Rich Lesser of Boston Consulting Group, have a responsibility to prioritize value-creating diversity goals, potentially by expanding their talent networks.
Although affirmative action as it stands may be ending, companies still have the opportunity to cultivate diverse pipelines, according to BSR’s Jarrid Green.
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