In three long-awaited decisions released on June 29-30, the Supreme Court has altered the legal landscape between an employer and its employees. One decision concerning affirmative action and the use of race-based decision making will require employers to review their hiring and diversity initiatives. Another will have an immediate impact on the analysis employers utilize for determining religious accommodations in the workplace. The most recent case clarifies freedoms business owners maintain, but could cause stumbling blocks for unwitting employers.

Affirmative Action

In a 6-3 split, the Supreme Court struck down affirmative action admissions policies used by two of the country’s premier educational institutions—Harvard University and the University of North Carolina—on the grounds that the policies’ use of race violates the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. The case is titled: Students for Fair Admissions v. President & Fellows of Harvard College.

Background: In November 2014, a nonprofit organization, the Students for Fair Admissions (SFFA), filed separate lawsuits against Harvard and UNC arguing that their race-based admissions policies violated Title VI of the Civil Rights Act of 1964, as well as the Equal Protection Clause of the Fourteenth Amendment. The universities successfully fended off these challenges in the lower courts. The Supreme Court reversed the decisions of the lower courts, finding that these policies violated the Equal Protections Clause.

The Court’s decision: Chief Justice John Roberts, for the majority, determined that Harvard’s and UNC’s admissions policies do not pass the constitutional strict scrutiny analysis required for race-based decision-making. The majority placed particular emphasis on the lack of objective and measurable standards to quantify the stated reasons for use of race in their admissions practices.  The Court cautioned also against other indirect uses of race, stating that use of race must connected directly to the individual’s skills, background and qualifications. In that regard, the Court noted that its decision does not prohibit universities from “considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.” Slip op. at 39.

What does this mean for employers? Claims against both universities included alleged violations of Title VI of the Civil Rights of 1964. Title VI contains similar prohibitions against race discrimination as Title VII of the Civil Rights Act and 42 U.S.C. § 1981 in the employment context.

Many employers have formal or informal affirmative action practices, as well as diversity, equity, and inclusion (DEI) initiatives to enhance diversity and inclusion in the workplace. Employers should review their affirmative action and DEI practices to ensure they are in line with the guidance from the Supreme Court in the SFFA cases.

Religious Accommodations

Also on June 29, 2023, in a unanimous decision the Supreme Court clarified the legal standard for employers for assessing religious accommodations in the workplace per Title VII.  The case is titled: Groff v. DeJoy.

Background: This case began when petitioner Gerald Groff sued his employer, the United States Postal Service (USPS), under Title VII for failing to provide Groff with his requested religious accommodation of not working on Sundays due to his religious beliefs. The USPS took the position that the request posed an undue burden. Lower courts agreed with USPS. The Supreme Court reversed.

The Court’s decision: The case turned on the legal standard set by the Court in 1977 in Trans World Airlines, Inc. v. Hardison. In Groff, the Court determined that lower courts mistakenly relied on a reference in Hardison that employers should not bear more than a de minimis cost in determining if a requested religious accommodation imposes an undue burden. The Court clarified that the legal standard it that an employer must show that granting an accommodation due to sincerely-held religious beliefs would result in substantial increased costs in relation to the employer’s particular business.

What does this mean for employers? As a result of Groff, employers should consider all aspects of how different religious accommodations may impact the nature and costs of their particular businesses. Employers should be cognizant of this change going forward because a failure to abide by these new procedures could render Title VII liability.  

Freedom of Speech

To turn to an employer-friendly update, on June 30, 2023, the Supreme Court ruled 6-3 that the First Amendment prohibits states from forcing business owners to speak messages with which the business owners disagree. This case is titled: 303 Creative LLC v. Elenis.

Background: 303 Creative LLC was a company created to offer website and graphic design, marketing advice, and social media management services. 303 Creative LLC’s owner Lorie Smith wanted to move her business into the market of wedding websites. However, she was concerned to do so because she believed the state of Colorado would force her to express views inconsistent with her belief that marriage should be between one man and one woman. At the time, Colorado enforced a law prohibiting public-facing businesses from denying the full and equal enjoyment of its goods and services to any customer based on, amongst other classes, sexual orientation. Accordingly, Smith filed suit to clarify her rights under the First Amendment to the Constitution.

The Court’s decision: The question in this case was whether Colorado could require 303 Creative LLC to express messages that Smith disagreed with. Both the district court and the Tenth Circuit ruled against Smith. On appeal, the Supreme Court found that the First Amendment’s Free Speech clause prohibited Colorado from forcing an individual to speak in ways that align with the state’s own views but defies the individual’s own conscience about a matter of significance. In coming to this decision, the Court explained that the First Amendment’s commitment to the freedom of speech prohibits states from compelling speech, no matter how vital or sensible that speech may be.

What does this mean for employers? As business owners, this case may reassure employers that no state government may require them to express messages and ideas that do not comport with their own beliefs. Nevertheless, employers should be cautious when considering the employment implications of this case. Employees are still entitled to numerous workplace protections under many state and federal laws. By no means is this case an avenue to avoid those protections.