Supreme Court Strikes Down Race-Conscious Admissions: Implications for Corporate DEI Programs

1. The Historical Legal Landscape of Race-Conscious Admissions

The Supreme Court’s 1978 decision in Regents of the University of California v. Bakke constitutes the precedent that allowed colleges and universities to consider race in their admissions policies for nearly 45 years. Bakke concluded that, while schools may not use racial quotas, racial diversity is a compelling state interest, and schools may consider it in admissions so long as race is only one among many factors.

In 2003, the Court affirmed its Bakke holding in Grutter v. Bollinger, determining the University of Michigan Law School’s admissions regime survived constitutional scrutiny because race alone was not determinative of admission. The case also clarified that strict scrutiny of any race-conscious criteria required by the Equal Protection Clause applies equally to public and private higher education institutions under Title VI of the Civil rights Act of 1964. Nevertheless, the Court expressed its hope that the consideration of race in admissions would not always be necessary to ensure racial diversity, with the Court “expect[ing] that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today.” Twenty years later, the Court again took up the question decided in these cases.

2. The SFFA Decision

a. Admissions Regimes Under Review

Both Harvard and UNC argued their admission regimes were lawful under the Court’s prior precedent, employing approaches that consider race among other factors in making admissions decisions. Each challenged regime gave a plus-factor to candidates that are members of under-represented racial or ethnic groups and had differing cutoffs for standardized test scores depending on the race or ethnicity of the applicant.

b. The Court’s Reasoning Under the Equal Protection Clause of the Fourteenth Amendment and Title VI of the Civil Rights Act

While the analysis in the majority opinion is dedicated to the Equal Protection Clause of the Fourteenth Amendment, with only a passing mention of Title VI, the Court made clear that its ruling also applies to Title VI. According to the Court: “We have explained that discrimination that violates the Equal Protection Clause of the Fourteenth Amendment committed by an institution that accepts federal funds also constitutes a violation of Title VI.” Gratz v. Bollinger, 539 U. S. 244, 276, n. 23 (2003).

The Court explained that the Equal Protection Clause was founded on the principle of “not permit[ting] any distinctions of law based on race or color.” Quoting Bakke, the Court noted that, under the Equal Protection Clause, “[e]liminating racial discrimination means eliminating all of it,” which must be applied equally to all races and ethnicities. In addition, the Court said: “If both are not accorded the same protection, then it is not equal.” This reasoning laid part of the groundwork for the Court’s determination that advantaging or favoring one race over another, even with the aim to foster campus diversity that benefits all students, serves no compelling interest.

c. The Impact on Higher Education Institutions

As the Court no longer considers the achievement of racial diversity in academia a compelling state interest, institutions must explore “race-neutral” alternatives to achieving a diverse student body. However, the majority opinion suggested that schools may still consider candidates’ individual narratives of how race impacted their lives, which may be described in admissions essays. And the Department of Education has committed to providing guidance by mid-August to “provide clarity on what admissions practices and additional programs to support students remain lawful” and to “provide assistance to colleges and universities in administering programs to support students from underserved communities.” White House, Fact Sheet: Pres. Biden Announces Actions to Promote Educational Opportunity and Diversity in Colleges and Universities (June 29, 2023). Regardless, both experts for Harvard and UNC argued that race-neutral alternatives would not be able to create the same racial diversity as was achieved under their challenged admissions regimes.

3. Potential Impact Beyond Higher Education

a. The Diversity Pipeline

Numerous employers across the country filed amicus briefs with the Court, warning of the potential harmful effect a decline in diversity at higher educational institutions would have on the composition of America’s future workforce leaders. They contended that the inability of colleges and universities to ensure a racially and ethnically diverse student body will necessarily reduce the pipeline of qualified diverse candidates to corporate America, particularly in the STEM arena. Without a racially and ethnically diverse workforce, these business leaders argued, thought leadership and innovation will suffer. Accordingly, they contended that employers will need to increase—not decrease—their DEI efforts to ensure a diverse and equitable workplace culture. The ruling in SFFA, however, could present increased legal barriers to workplace DEI programs.

b. Extension of SFFA to Other Civil Rights Laws

The Court’s majority decision that race-conscious admissions programs are unlawful under Equal Protection and Title VI did not directly address the role of race-conscious initiatives that are part of corporate DEI programs. Typically, such programs may come under scrutiny pursuant to Title VII of the Civil Rights Act or similar state and local laws in the case of workplace DEI programs, and under Section 1981 which prohibits race discrimination in contracting in the case of procurement DEI programs. Notably, Title VI, Title VII, and Section 1981 have similarities in that each speaks in terms of making “discrimination” unlawful. If race-conscious decision-making is unlawful under Title VI, organizations can anticipate legal challenges that analogize these Title VI rulings to other federal civil rights laws.

c. Future Challenges to DEI Programs

While it will take months or even years before the legal landscape realizes the full reach of the Court’s decision, especially outside of the admissions context, there are indicators—both in the Justices’ majority and concurring opinions and through a responsive statement from the EEOC—that signal next steps in the wake of this ruling.

As noted, the Court’s majority decision speaks to both Equal Protection and Title VI. However, critical to the question of how the decision might relate to workplace DEI programs, and the role of Title VII in reverse discrimination claims attacking such DEI programs, Justice Gorsuch, who joined the majority, also wrote separately to emphasize that the universities’ practices also violate Title VI. According to Justice Gorsuch, the Title VI violation is actually easier to establish since Title VI allows no discrimination, whereas the Equal Protection Clause allows limited discrimination under the strict scrutiny standard (i.e. where there is a compelling state interest and the approach is narrowly tailored to meet that interest). In Justice Gorsuch’s concurring opinion, the leap to Title VII is readily apparent, and Justice Gorsuch expressly made that leap.

More specifically, the key statutory phrases in Title VI are “subjected to discrimination” and “on the grounds of” race or ethnicity (which, according to Justice Gorsuch, means “because of”). According to Justice Gorsuch, under Title VI, it does not matter if some other factor or factors were at play; if race was a factor, that is sufficient to violate Title VI. Because the language of Title VII uses similar phrases—“to discriminate against” and “because of” —the majority’s holding, combined with Justice Gorsuch’s concurrence, arguably provide a roadmap for increased Title VII reverse discrimination claims focused on the hiring, advancement, development, and compensation aspects of workplace DEI programs.

Anticipating what is to come, the U.S. Equal Employment Opportunity Commission (EEOC) issued a statement the same day as the ruling, emphasizing that the Court’s decision “does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” EEOC, Statement from EEOC Chair Charlotte A. Burrows on Supreme Court Ruling on College Affirmative Action Programs (June 29, 2023).

Like Title VI and Title VII, Section 1981 of the Civil Rights Act speaks in terms of making “discrimination” unlawful and specifically provides: “All persons within the jurisdiction of the United States shall have the same right…to make and enforce contracts…and to the full and equal benefit of all laws and proceedings….” 42 U.S.C. § 1981(a)) (emphasis added). While the majority opinion does not analyze Section 1981 (though the statute is discussed in Justice Sonia Sotomayor’s dissent), Justice Gorsuch’s concurrence, which allows for no consideration of race in the context of Title VI, could serve to embolden claims by majority business owners that supplier diversity programs—often part of corporate DEI programs—violate Section 1981 by promoting opportunities for diverse-owned businesses to compete for contracts.

As the majority emphasized, under strict scrutiny, race cannot be used as a negative for the group not benefiting from the program in question. According to the Court, when a program is a “zero sum game,” as it is in admissions (or arguably in the realm of competitive contracts) then the admission of (or award to) one is the rejection of another. In light of that reasoning, it would not be surprising to see reverse discrimination claims premised on Section 1981 that challenge corporate supplier diversity programs by analogizing to the reasoning in the Court’s opinions in SFFA. Likewise, the Court’s decision does not immediately impact workplace affirmative action programs mandated by Executive Order 11246 and other affirmative action laws, although, as with Section 1981, a challenge to such laws could follow.

The juxtaposition of the Court’s analysis with the EEOC’s unambiguous statement, and the facially similar language among key federal civil rights statutes—Title VI, Title VII, and Section 1981—set the stage for future legal disputes outside of the realm of college admissions. In the meantime, organizations should be prepared to evaluate their DEI programs in light of the Supreme Court’s decision and develop an inventory of DEI policies, programs, practices, and initiatives with an eye toward what might be the most vulnerable to legal action in a post-SFFA climate.

Ballard Spahr lawyers in the Labor & Employment, Education Industry, and Diversity, Equity and Inclusion Counseling Groups are available to assist clients in navigating this new legal landscape.

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