Last week the United States Supreme Court issued a 6-3 decision ending a four-decade precedent which had allowed universities and colleges to consider the race of applicants during the admissions process. What, if anything, does this mean for private employer DEI efforts?

First, the question before the Supreme Court was constitutional in nature. Specifically, does the use of race in the admission process violate Equal Protection? As we know, the constitution protects individuals from acts of the government, and private employees don’t have Equal Protection rights as it relates to their relationship with private companies.

Employees do, however, have rights under Title VII and state fair employment practices legislation which provide similar protections. Specifically, these protections provide that an employer cannot make employment decisions on account of race (and other protected classifications). Those employment decisions include adverse employment decisions and positive employment decisions.

Second, while Title VII and most state and local fair employment practices acts limit an employer’s ability to take race and other protected classifications into account in employment decisions, there are some exceptions. Specifically, if the employer is a federal contractor, with an affirmative action plan in place, or if the employer has a voluntary affirmative action program (for those employers who are not federal contactors).

Federal contractors and subcontractors have a number of obligations under the Vietnam Era Veterans' Readjustment Assistance Act of 1974, the Rehabilitation Act of 1973, and Executive Order 11246. These programs provide requirements for meeting standards regarding employment of different individuals based on race, color, gender, religion, national origin, veteran status, and disability status. Organizations that are federal contractors or subcontractors have requirements including training programs and outreach efforts that are incorporated into the company's written personnel policies. Employers are to create written affirmative action programs, keep them on file, and update them annually. Additionally, employers are expected to have plans in place to attract, maintain, and promote individuals who fall within the protected categories.

A voluntary affirmative action program is different—and also distinct from general DEI efforts. The EEOC defines workplace diversity as "a business management concept under which employers voluntarily promote an inclusive workplace. Employers that value diversity create a culture of respect for individual differences in order to 'draw talent and ideas from all segments of the population' and thereby potentially gain a 'competitive advantage in the increasingly global economy.'" Accordingly, workplace diversity initiatives are forward-looking. This is separate and distinct from an EEOC voluntary affirmative action program, which is backward-looking, or designed to remedy past discriminatory conduct. The Code of Federal Regulations specifically notes "Circumstances under which voluntary affirmative action is appropriate," noting:

(a) Adverse effect. Title VII prohibits practices, procedures, or policies which have an adverse impact unless they are justified by business necessity. In addition, Title VII proscribes practices which “tend to deprive” persons of equal employment opportunities. Employers, labor organizations and other persons subject to Title VII may take affirmative action based on an analysis which reveals facts constituting actual or potential adverse impact, if such adverse impact is likely to result from existing or contemplated practices.

(b) Effects of prior discriminatory practices. Employers, labor organizations, or other persons subject to Title VII may also take affirmative action to correct the effects of prior discriminatory practices. The effects of prior discriminatory practices can be initially identified by a comparison between the employer's work force, or a part thereof, and an appropriate segment of the labor force.

(c) Limited labor pool. Because of historic restrictions by employers, labor organizations, and others, there are circumstances in which the available pool, particularly of qualified minorities and women, for employment or promotional opportunities is artificially limited. Employers, labor organizations, and other persons subject to Title VII may, and are encouraged to take affirmative action in such circumstances, including, but not limited to, the following:

(1) Training plans and programs, including on-the-job training, which emphasize providing minorities and women with the opportunity, skill, and experience necessary to perform the functions of skilled trades, crafts, or professions;

(2) Extensive and focused recruiting activity;

(3) Elimination of the adverse impact caused by unvalidated selection criteria; and

(4) Modification through collective bargaining where a labor organization represents employees, or unilaterally where one does not, of promotion and layoff procedures.

29 C.F.R. § 1608.3 (Citations omitted). Such diversity initiative often includes goals as to how the organization can attract and retain a more diverse group of applicants and employees. The Supreme Court in United Steelworkers v. Weber set forth the following criteria in establishing an appropriate diversity initiative:

(1) The plan is remedial in nature, in that there has been past discrimination or possible adverse impact as to the group in question.

(2) The plan does not unnecessarily interfere with the interest of non-minority employees, such as by terminating those employees to replace them with diverse employees.

(3) The plan or program is temporary in nature with the goal of achieving some type of balance without maintenance.

This third element should be highlighted by employers as it was a key point of the Supreme Court’s decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College. The voluntary affirmative action program cannot go on indefinitely but must be temporary in nature. Employers who do not have either a mandated affirmative action plan in place or a voluntary affirmative action program who are directly taking race and other protected classifications into account when making employment decisions (even if the decisions are not adverse in nature), run the risk of violating Title VII.