Last week, in ruling on Students for Fair Admission, Inc. v. President and Fellows of Harvard College (Harvard) and Students for Fair Admission, Inc. v. University of North Carolina (UNC), the United States Supreme Court overturned over forty years of legal precedent and struck down affirmative action policies at both Harvard University and the University of North Carolina at Chapel Hill. This is not an employment law decision. However, we expect that, moving forward, this decision will likely result in more litigation related to corporate diversity, equity and inclusion (DEI) programs and cause other issues with corporate DEI efforts.

Supreme Court cases involving affirmative action programs in education can be traced back to 1978, wherein Regents of the University of California v. Bakke, the Supreme Court found that a university’s admission criteria which used race as a definite and exclusive basis for an admission decision violated the Equal Protection Clause of the Fourteenth Amendment and Title VI of the Civil Rights Act of 1964. In the last twenty years, the Supreme Court has addressed affirmative action programs in education in both Grutter v. Bollinger (2003) and Fisher v. University of Texas at Austin (2016). In Grutter, the Court held that the use of race as a factor in admissions is not prohibited by the Equal Protection Clause or Title VI, so long as it narrowly tailored to further a compelling interest in obtaining the educational benefits that flow from a diverse student body. In Fisher, the Court, relying in part on Grutter, confirmed that a race-conscious admission process was lawful as it was narrowly tailored to achieve a compelling state interest and no other race-neutral and workable alternatives were available.

In last Thursday’s ruling, the Supreme Court consolidated the cases into one decision and issued a 6-3 decision. The decision overturned existing precedent and determined that colleges and universities can no longer use race as a factor in their college admissions as doing so violated the Equal Protection Clause of the Constitution. The Court’s majority opinion outlined three main issues with Harvard and UNC’s affirmative action admission processes: 

• the universities’ programs did not satisfy “strict scrutiny” (noting that “a benefit provided to some applicants but not to others necessarily advantages the former at the expense of the latter”), 
• perpetuated racial stereotypes and assumptions, and 
• did not have an end point.  

In the consolidated decision, the Supreme Court indicated that universities could consider an applicant’s discussion of how their race impacted their life, including how race related to the applicant’s quality of character or their ”unique ability to contribute to the university.” However, using race in any other way for college admissions is likely outlawed by the decision, unless the situation is covered by the lone exception the Court granted for military academies, which can still utilize affirmative action.  

This ruling comes at a time where initiatives for DEI programs and environmental, social, and governance (ESG) commitments in the workplace, as well as initiatives for the formation of workplace affinity groups have intensified. For the last few years, companies across the United States have worked vigorously and publicly to try to ensure that their workplaces were more inclusive and more diverse. It is estimated that at least 80% of employers in the United States have some sort of DEI program in effect. 

On its face, the Supreme Court’s recent decision is limited to higher education and does not directly reference employers. However, the outcome is very likely to have wide-reaching implications in the workplace, starting almost immediately. First, many employers are very concerned that without affirmative action, the pipeline of highly qualified diverse workers and future business leaders will be narrowed significantly, making it even more difficult to locate qualified diverse employees and leaders. With the inevitable rippling effects of this ruling, the groups that have successfully attacked the constitutionality of affirmative action programs in education, are likely to now begin levying the same attack on corporate DEI programs, thereby putting businesses that have DEI programs at risk for expensive and drawn out litigation. In addition, this decision may also spur a material increase in “reverse discrimination” charges and lawsuits by non-diverse applicants and workers.  

Affirmative action was a type of DEI program. Therefore, the Students for Fair Admission offers an inside look into the views of our current Supreme Court justices on DEI and using race to evaluate applicants. Employers should carefully review and examine their current DEI efforts and initiatives to determine whether these efforts and initiatives are in violation of the principles articulated by the majority decision in Students for Fair Admission. If so, employers should consider whether they want to eliminate certain practices and/or make changes to them and try to bring their DEI programs in line or closer in line to the essential points of the majority opinion in Students for Fair Admission. Such changes may make it more difficult to hire, promote and retain a diverse workplace, but may also minimize litigation risks. Employers will have to perform a difficult balancing test to determine how they want to balance these competing interests.  

In light of the Students for Fair Admission decision, employers should also avoid hiring applicants or promoting employees to meet any sort of “diversity quota.” It is pretty clear that such a process will not be endorsed by the Supreme Court. Finally, employers that wish to continue formal programs to promote DEI in their workplaces, but are concerned about the decision, should consider working with their counsel and/or diversity professionals and consultants to look at creative ways to continue to help promote diversity, equity and inclusion in their workplaces without running afoul of the principles articulated by Justices Roberts, Thomas, Alito, Gorsuch, and Barrett in the majority and concurring opinions.