Companies Expect New Challenges to Diversity Policies After Court Ruling Banning Affirmative Action School Admission Policies

Employers brace for greater scrutiny of programs meant to recruit and retain women and underrepresented groups.

Companies expect Thursday’s Supreme Court ruling on affirmative action to reduce racial diversity in the pool of highly educated candidates for future jobs, including leadership roles.

They also say the ruling, which prohibits race-conscious college admissions, will lead to challenges to internal diversity, equity and inclusion initiatives, many of which were put in place or augmented over the past few years.

Many large employers have said that affirmative action assists businesses by helping them serve a diverse universe of customers and clients. They have cited research showing that diverse teams are more creative and make better decisions than homogeneous ones. 

Opponents of affirmative action and diversity initiatives in the workplace say such policies are ineffective, divisive or based on illegitimate factors. 

Many companies said they plan to continue diversity initiatives after the Supreme Court’s ruling. The decision, though, will require employers to articulate why programs meant to increase representation matter to a company’s performance, executives say.

“It doesn’t change our focus,” said Iesha Berry, chief diversity and engagement officer and head of people experience at DocuSign. The technology company plans to reiterate that diversity is “not a stand-alone, and it’s not something that is, unfortunately, seen as the flavor of the day, but critically important to the business and the business success,” Berry said.

In a joint amicus brief filed to the court on behalf of large companies such as Procter & Gamble, Facebook parent Meta Platforms, Starbucks and dozens of others, employers argued that companies relied on universities to help them recruit from a broad pool of prospective candidates. Students trained in diverse environments also gain the skills needed to compete better in the global economy, the companies said in the brief.

“For marketing and other commercial reasons, many corporations need to pay attention to diversity,” said Roger King, senior labor and employment counsel for the HR Policy Association, a business group that filed an amicus brief supporting affirmative action. “The bottom line will dictate diversity in many instances.”

About 60% of workers believe workforces should reflect the diversity of the communities in which they operate, according to a new survey of U.S. employees’ views about discrimination and equity. At the same time, around 20% say they are opposed to workplace programs designed to ensure that people of color are treated equally when it comes to job opportunities, according to the survey, which was conducted by the Heldrich Center for Workforce Development at Rutgers University.

Federal law prohibits organizations from considering race—and many other characteristics, such as sex, national origin and religion—as a factor in employment decisions except in rare circumstances. In recent years, though, particularly after the murder of George Floyd in police custody, companies stepped up efforts to increase diversity in their workforces. Many companies appointed chief diversity officers for the first time, or published specific goals for the representation of women or minorities. 

“Employers have always been walking this tightrope of having targets and goals and not quotas,” said Ian Carleton Schaefer, a partner in the labor and employment practice at the law firm Sheppard, Mullin, Richter & Hampton in New York. “This decision just snapped the tightrope.”

The ripple effects of the Supreme Court’s decision on companies could be extensive and felt for years to come, executives, employment lawyers and corporate advisers say. Rules for federal contractors, which require submission of a workforce analysis based on race, gender and other characteristics, could get a closer look, they say.

Some employers said they expect existing initiatives to be questioned more frequently by employees, while others predict such efforts could face legal challenges if the existence of race- or gender-based goals is seen by some as discrimination. 

“Is just having a DEI goal on its face de facto saying you’re going to provide preferential treatment to a demographic? I don’t think that’s the case,” though some might attempt to interpret it that way in discrimination or harassment claims, said Sheila Willis, co-chair of the affirmative action and federal contract compliance practice group at Fisher & Phillips.