Affirmative Action Decision Could Create ‘Chilling Effect’ For Companies

Topline

The Supreme Court determined colleges and universities can no longer use race as a factor in their college admissions, removing affirmative action from academics—and some businesses could find their own hiring practices suddenly under new scrutiny.

Colleges and universities can no longer use race as a factor in their admissions decisions, the … [+] Supreme Court ruled Thursday, striking down the decades-long practice of affirmative action and upending schools’ admission tactics—which they warn could make future student bodies significantly less diverse. (AP Photo/Hannah Schoenbaum, File)

Key Facts

The ruling means universities cannot use race to pursue diversity initiatives—which is something employers have never been able to do—so there shouldn’t be any direct implications to businesses’ hiring practices or internal diversity efforts, but some experts have speculated the decision will have a “chilling effect” on businesses that will grow concerned about lawsuits against diverse hiring practices and initiatives to improve diversity.

Alvin Tillery, a political science professor and director of Northwestern’s Center for the Study of Diversity and Democracy, told Forbes those lawsuits will surely come, but expects companies will still be able “to set targets and baseline goals around diversifying their workplace.”

Tillery said companies genuinely committed to doing the work will find a way to continue amid backlash—likely by reframing their practices to “drop the diversity angle” and focus on the requirement to not discriminate through the Civil Rights Act—and companies that aren’t committed will just stop talking about it.

Stacy Hawkins, a vice dean of law at Rutgers University specializing in employment law and diversity, echoed that, saying if the court’s decision is narrowly focused on academic admission practices, it shouldn’t have direct implications for employers’ hiring or diversity practices.

Don Harris, associate dean and equity, diversity and inclusion liaison at Temple University School of Law, agreed with Hawkins, saying because the decision was narrowly focused on academics, it shouldn’t affect anything outside of that, though he warned it could encourage future litigation.

Crucial Quote

“The writing’s on the wall … it’s a recipe for allowing people to then start bringing other cases before the court” targeting diversity practices in other fields, Harris told Forbes.

News Peg

The Supreme Court agreed to take up two cases in January 2022 concerning affirmative action: one challenging Harvard University’s admission practices and the other aimed at the University of North Carolina, after lower courts sided with the schools and upheld affirmative action, prompting the plaintiff—a group called Students for Fair Admissions— to appeal the case to the high court. In its ruling, the court declared colleges and universities can no longer use race as a factor in their admissions decisions, striking down the decades-long practice of affirmative action and upending schools’ admission tactics. The Supreme Court first approved affirmative action for university admissions in 1978—though it ruled schools could not use racial quotas for admissions—and again affirmed the practice in rulings in 2003 and 2016.

Key Background

Affirmative action was first established in a 1965 executive order that directed employers to “take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.” Today, employer DEI and affirmative action programs fall under the jurisdiction of federal and state employment anti‑discrimination laws and Title XII, which don’t allow companies to consider race when hiring, even if it’s intended to increase diversity. Diversity efforts at corporations in the U.S. boomed in 2020 and beyond in the aftermath of protests after the murder of George Floyd as companies worked to ensure their workplaces were inclusive and their staffs diverse and reflective of their communities. There was a 168.9% increase in hires for chief diversity and inclusion officers in the past four years, though the role saw a 4.5% decline in hires last year, according to a LinkedIn report. Since the trend of hiring leaders to improve DEI efforts started, some major companies—including Amazon, Twitter, Wayfair and Nike—have cut the positions, the Washington Post reported, leading critics to allege the focus on diversity was short-lived and that companies are struggling to connect their actions internally to the statements of support they’re publicizing. Nonetheless, it’s estimated that 80% of employers in the U.S. have some kind of DEI in place.

Tangent

Another potential impact of the decision on the business sector is what the pool of talent being produced by universities in a post-affirmative action world will look like. Sixty major companies—including Apple, General Electric and Starbucks—got involved months before the decision, filing a brief in support of Harvard and North Carolina that argued “racial and ethnic diversity enhance business performance” and said they rely on universities to produce diverse leaders for businesses to recruit. The companies said in the brief that “acknowledging, supporting and promoting the benefits of diversity—specifically including racial and ethnic diversity—among their workforces is essential to meet client needs, achieve business goals, and strengthen relationships both internally and with the communities (they) serve.” Without universities having the ability to recruit racially diverse student bodies, the businesses expressed concern about the students being put into the workforce.