The U.S. Supreme Court recently held that it is illegal to consider race in college admissions decisions. While the decision did not apply to employers, employers should be aware that the decision is being used as a roadmap to challenge employment decisions and diversity, equity and inclusion (DEI) initiatives. 

Supreme Court Decision

In Students for Fair Admissions, Inc. v. President & Fellows of Harvard College (“SFFA”), the U.S. Supreme Court reversed its longstanding precedent and held that using race as a plus factor in admissions decisions violates the Equal Protection Clause of the Fourteenth Amendment. The Supreme Court’s decision on affirmative action in college admissions is based on an assessment of (1) Title VI of the Civil Rights Act of 1964 (“Act”), which prohibits discrimination on the basis of race, color, and national origin in programs and activities receiving federal financial assistance, and (2) the Equal Protection Clause of the Fourteenth Amendment, which applies only to government entities. 

Importantly, it is Title VII of the Act, not Title VI, that applies to the private employment environment. Title VII is more expansive than Title VI, and restricts discrimination based on a multitude of protected classes – such as sex, religion, or race – for private employers with 15 or more employees. Of note, Massachusetts’ state anti-discrimination law covers any employer with six or more employees.

Following the Supreme Court’s Decision

The Court’s decision quickly spurred conflicting commentary as to the potential impact on private employer’s DEI initiatives. Within weeks of the decision, 13 Republican state attorneys general sent a letter to the CEOs of Fortune 100 companies to remind them of their “obligations as an employer under federal and state law to refrain from discriminating on the basis of race, whether under the label of ‘diversity, equity, and inclusion’ or otherwise.” The attorneys general asserted that the Supreme Court’s rationale applies equally to private employers under Title VII. In response, 21 Democratic attorneys general – including Massachusetts’ Andrea Campbell – sent their own letter asserting that the Supreme Court decision has no bearing on the legality of company DEI initiatives. Instead, the letter encouraged employers to continue examining and refining their recruiting, retention, and professional development practices to remove “unnecessary barriers” to diversity. 

Assessing the Impact of SFFA on Private Employers

For starters, it remains illegal for employers to consider any single candidate’s or employee’s race – even with the intention of creating a more diverse, equitable, or inclusive workforce – in any employment decision under Title VII.

Gender-conscious or race-conscious hiring practices are only permitted, even after the SFFA decision, as part of a limited, temporary, and highly structured affirmative action program under the guidance of the Equal Employment Opportunity Commission. These formal programs are only lawful after an employer has found evidence of company-wide or industry-wide hiring discrimination. In practice, these formal affirmative action programs do not apply to most employers. 

Instead, employers who seek to promote and foster a more diverse and inclusive workforce often do so through less formal DEI initiatives. When done right, DEI initiatives can reduce the risk of employment discrimination and hostile work environment claims. These initiatives can take many forms, from training and education programs, expanding the applicant pool to include underrepresented individuals, to mentorship and scholarship programs. 

In the post-SFFA legal landscape, employer DEI initiatives may be closely scrutinized. Employers should ensure that their DEI initiatives comply with Title VII, which strictly prohibits the use of plus factors, preferences, and quotas. That is, employers cannot create de facto hiring quotas, reserve positions for certain groups, or use an individual’s race as a “tie breaker” in employment decisions as part of their DEI initiatives. Title VII also prohibits employers from taking an “adverse employment action” against employees based on their protected status. An “adverse employment action” has been defined as one that “materially and adversely affected the terms, conditions or privileges” of a worker’s employment.

Emboldened by the Supreme Court’s decision, numerous lawsuits alleging reverse discrimination and challenging DEI initiatives have already popped up across the country. The Supreme Court appears eager to hear these challenges. As one example, the Court has recently agreed to decide whether it should expand the definition of “adverse employment action” to include more than hiring, promotion and termination decisions. The Court’s decision could have far-reaching implications on DEI initiatives that were previously thought to be safe from Title VII challenges. 

What Should Employers Do Now?

It is still lawful for employers to develop programs and policies aimed at providing equal opportunities. However, employers should consult with their legal counsel to stay abreast of legal developments and to review their DEI initiatives, including all related internal messaging, to ensure that they are not engaged in illegal discrimination. Goals that look like quotas or set asides will risk legal challenge now more than ever.