Frustrated DEI Officers Risk Tackling Workplace Bias in Court

Employees leading corporate diversity, equity, and inclusion efforts are turning to the courts to address discrimination they say they’ve encountered or witnessed at work after finding they lack the tools to address inequities from within.

Armstrong Teasdale LLP is at the center of the latest of such lawsuits, in which its former vice president of DEI is alleging race and sex discrimination in violation of Title VII of the 1964 Civil Rights Act.

The case, filed late last month, alleges that the law firm withheld resources necessary for her to perform her job and subjected Black lawyers to a hostile work environment. Armstrong Teasdale has denied the allegations.

Morgan Stanley, United Airlines Inc., and Sales Force Inc. have faced similar lawsuits from their DEI professionals.

The cases highlight the broader, recurring concerns of many DEI managers: they often lack power, financial resources, and access to top executives, undermining companies’ commitments to addressing inequality, legal scholars and talent development experts said.

These worries, coupled with recent layoffs across the board, have pushed many out of their roles and contributed to a revolving door of talent, they said.

These are “certainly challenges that we have consistently heard from leaders,” said Val Lopez, a partner & DEI Practice Lead at executive search firm Hanold Associates LLC. The firm works with Fortune 100 companies to recruit executives for DEI and human resources roles.

“We’ve seen the average tenure for DEI officers. It was from three to 3.5 years to now, we’re looking at 1.5 to 2 years,” she said.

Diversity officers are “oftentimes brought into an organization where they were told they’re ready for change and transformation. But they’re not,” Lopez said. “And so this is what leads to them not feeling completely supported and given the actual authority to make decisions and create the impact that will result in DEI outcomes.”

“DEI and HR always have a challenge in the corporate suite,” said Steven Suflas, a management-side attorney at Holland & Hart LLP. “It’s important that they have a voice and a role there.”

Legal, Career Hurdles

Yet even in court, DEI managers face uphill battles stemming from a combination of factors, including mandatory arbitration agreements and the potential risks to future career prospects, legal scholars told Bloomberg Law.

Prior discrimination complaints from Black DEI managers in recent years have either been settled or sent to arbitration.

Mandatory arbitration agreements increasingly have been a means for companies to remove the leverage of a court complaint—particularly a potential class action—and require workers to resolve their grievances in private dispute resolution.

Arbitration supporters say it benefits all parties because it’s more time- and cost-efficient than litigation.

But critics like Linda D. Friedman, founding partner of Stowell & Friedman Ltd., argue that mandatory arbitration prevents transparency and thus allows companies to avoid accountability.

There won’t be many cases like the one against Armstrong Teasdale, she said. “This woman has an enormous amount of courage to file this suit.”

Cases of this nature have far-reaching implications for the careers and public profiles of workers like DEI officers, who themselves are often from historically marginalized communities, said Freidman, who has brought several high-profile race and sex bias class actions against financial firms since the 1990s.

“It will be next to impossible for her to work again in the industry of her choice. If a prospective employee Googles her name, when it pops up that she sued her last employer for race discrimination, nothing kills the application faster. So people don’t file these claims,” Freidman said.

Contraction, Expansion

Workplace DEI efforts boomed in the wake of George Floyd’s murder in Minneapolis police custody in 2020.

But those initiatives have faded amid recent economic pressure and increased legal threats from conservatives challenging their legality following the US Supreme Court’s June 2023 Students for Fair Admissions Inc. v. President and Fellows of Harvard College decision outlawing the use of race as a factor in college admissions.

Companies have slashed DEI roles at a higher rate than other positions, according to a recent study from workforce analytics firm Revelio Labs.

While DEI faces legal and political headwinds, a recent report from Littler Mendelson PC found that 57% of the 322 US-based corporate executives the firm surveyed said their companies actually expanded their diversity programs over the past year.

To mitigate liability risks and provide accountability and support for their DEI managers, businesses should redefine the roles, Holland & Hart’s Suflas said. Companies can do so by creating detailed job descriptions outlining specific responsibilities and reporting structures.

Diversity managers should work in unison with company executives by helping to devise business solutions, rather than only addressing or fixing problems, he said. Otherwise, they will lack influence in the workplace and be confined to HR-related tasks, he warned.

“They can’t be in a position where all they do is be doctors,” Suflas said.