Republican AGs Have Tough Legal Road Against Corporate Diversity

A warning from Republican attorneys general that Fortune 100 companies face “serious legal consequences” for their diversity initiatives is more likely to dissuade employers from continuing them out of fear of litigation, rather than actually invite a slew of lawsuits.

The 13-state coalition heightened uncertainty over the workplace implications of the US Supreme Court’s recent rejection of race-conscious college admissions policies. That decision bolsters the argument that programs aimed at boosting workplace diversity, equity, and inclusion violate federal and state anti-discrimination laws, according to the July 13 letter.

But the letter’s call to “immediately cease” consideration of race is a stretch and an overreaction because there’s nothing in the high court’s affirmative action ruling to suggest that workplace DEI programs are unlawful, legal scholars told Bloomberg Law.

The opinion—which focuses on the admissions policies of Harvard College and the University of North Carolina—doesn’t concern or implicate Title VII of the 1964 Civil Rights Act, which governs employment discrimination and DEI initiatives, they said.

“This letter is kind of a scare tactic” to force employers to roll back DEI programs and commitments, said Vinay Harpalani, who teaches constitutional and employment law at the University of New Mexico School of Law.

“Filing a lawsuit is the hard part because it costs time and money,” he said.

Using protected classes such as race to make employment decisions is generally illegal under federal and state anti‑discrimination statutes.

But there’s nothing inherently discriminatory about DEI programs created to—among other things—help weed out hiring bias, attract a wide pool of job candidates with a mix of backgrounds and experiences, and retain an inclusive workforce where individual personnel decisions aren’t based on race, legal scholars said.

There’s little case law addressing the legality of private employers’ DEI programs. As a result, the letter will likely push employers to reconsider those programs to avoid potential legal challenges and potentially a trip back up to the Supreme Court, Harpalani said.

Goals vs. Quotas

Workplace DEI efforts boomed in the wake of George Floyd’s murder in Minneapolis police custody in 2020 and the corporate racial reckoning that ensued.

The Republican AGs’ letter specifically called out these plans to hire more Black workers, saying they’re “racial quotas” and “explicitly race-based practices.”

Illinois Attorney General Kwame Raoul (D) disagreed with that characterization at a press conference Wednesday along with top Democratic state lawyers from Delaware, Massachusetts, Nevada, New York, and New Mexico. They promised legal defense to employers facing Republican-led legal challenges.

Setting “aspirational goals” based on demographics “in the interest of business gains” isn’t illegal, said Raoul. The letter seeks to “interfere” with corporate DEI plans, he said.

Stacy Hawkins, vice dean and professor at Rutgers Law School, told Bloomberg Law the Republican attorneys general “are trying to frame workplace diversity efforts as tantamount to quotas and preferences.”

“I wouldn’t disagree with the AGs that if these companies are engaged in racial quotas and preferences, they have a problem under prevailing workplace discrimination laws,” Hawkins said. “If you look at what’s actually being done, there’s no reason to believe that creating diversity goals and engaging in highly defensible recruitment practices to ensure a diverse workplace is impermissible.”

“As the Supreme Court recently emphasized, both our Constitution and our civil rights laws guarantee every American the right to be free from racial discrimination,” Tennessee Attorney General Jonathan Skrmetti said in a statement provided to Bloomberg Law.

“The Court’s reasoning means that companies, no matter their motivation, cannot treat people differently based on the color of their skin. Corporate America continues to have many avenues to help disadvantaged people and communities of all races without resorting to crude racial line-drawing,” said Skrmetti, who led the 13-state coalition along with Kansas Attorney General Kris Kobach.

A spokesperson for Kobach didn’t immediately reply to a request for comment.

Unclear Legal Path

Aside from the legal basis for a suit, legal scholars questioned whether the attorneys general actually have the enforcement authority under their respective states’ antidiscrimination laws to bring such a case to court.

“I do not see how a state AG would have standing to sue under Title VII” because the federal anti-bias law only allows suits from job applicants or employees who have suffered an adverse employment action, or by the US Equal Employment Opportunity Commission, said Pauline Kim, a law professor at Washington University in St. Louis.

Whether they could do so under state anti-discrimination laws depends upon the terms of those statutes, she said.

State laws vary, but “there’s typically no state attorneys’ general involvement in these cases,” said Michael Z. Green, a professor at Texas A&M University School of Law.

When a worker brings a claim against a private employer under state law, “they usually follow the state agency’s process where you file the charge and then go the court system,” said Green, who also serves as the director of Texas A&M’s workplace law program.

“Maybe one of the 13 states has a unique law that allows the attorney general to file an action, but I haven’t seen those cases,” he said.

Alabama and Arkansas in particular—whose attorneys general signed on to the letter—don’t have a state antidiscrimination agency. Workers there must file charges directly with their local EEOC office.

Investigations Likely

In the near term, the attorneys general are likely to investigate companies’ hiring practices instead of bringing legal action, some legal scholars said

“To sue in court, they’d have to demonstrate harm they’d specifically suffered by a DEI program,” said Ishan Bhabha, co-chair of Jenner & Block LLP’s DEI Protection Task Force. “That’s a harder argument for them to make, so I think this is more about the kinds of investigations they might launch,” he said.

Still, an investigation might not reveal illegal discriminatory practices because DEI programs don’t use the race-conscious considerations that the Supreme Court previously endorsed in the higher education context, he said.

“The time and expense you’d have to spend would be significant,” and state attorneys general would eventually waste their own resources, Bhabha said.