Amid our evolving socio-political landscape, the concept of diversity, equity, and inclusion has taken center stage.

Once a universally accepted acronym in corporate parlance, DEI has been fading gradually from the corporate lexicon.

The backlash reached a critical juncture with the United States Supreme Court’s decision to strike down affirmative action in higher education in Students for Fair Admissions v. President & Fellows of Harvard College (SFFA).

While the decision did not change existing law in the employment context, it ignited a series of legal challenges targeting corporate DEI programs.

This mounting legal assault has put corporate diversity programs in the spotlight and intensified the debate about DEI in the workplace. Companies are grappling with the risk of litigation and questioning the viability of moving forward with their DEI initiatives, an uncomfortable dilemma for businesses that promised transformation.

Despite the challenges, DEI is not going away.

The United States is more racially and ethnically diverse than it has ever been, and it continues to diversify at an accelerated pace.

As Justice Sotomayor noted in her SFFA dissent, “Diversity is now a fundamental American value, housed in our varied and multicultural community that only continues to grow.”

What is the Legal Landscape?

• DEI’s legal landscape is complex and evolving. While the SFFA decision does not change existing law for employers or make corporate DEI initiatives unlawful, there are some best practices to mitigate risk:
• Discrimination based on protected categories remains unlawful. Anti-discrimination laws protect all employees, including male and White employees.
• In the employment setting, unlike the higher education setting, affirmative action policies meant to achieve diversity have never been permissible, except in very limited circumstances for employers that develop a lawful affirmative action plan that meets specific criteria and is narrowly tailored to address identified problems.
• DEI programs that are focused on eliminating bias and removing barriers to equal employment opportunities remain legal.
• A DEI program or training can create legal risk if the design or implementation of the training contributes to a “hostile work environment” under Title VII. Cases are pending that may offer more guidance on these types of claims, such as De Piero v. Pennsylvania State University. In this case, a White professor at Penn State alleged that the University’s mandatory anti-racism training, which singled out White employees, subjected him to a hostile work environment. In January 2024, U.S. District Court Judge Wendy Beetlestone denied the University’s motion to dismiss, finding that the DEI training, as described by De Piero, “plausibly amounts to pervasive harassment.”

How Can Employers Reduce Risk?

• Work with legal counsel to review DEI programs and policies to evaluate potential legal risks in light of the SFFA decision. Particularly risky are policies that give preference to individuals of a protected group where the preference relates to palpable job-benefit programs (e.g., promotion, pay raise, access to training, etc.). Some of the more common higher-risk DEI programs include hiring quotas and group-specific internships.
• Review job descriptions to ensure they are written neutrally. Job descriptions should have objective qualification standards that are applied consistently across all candidates.
• Mitigate Implicit Bias at the Systemic Level. Implement strategies to reduce unconscious biases in hiring and promotion practices. For example, consider using a “blind recruitment” strategy by redacting applicant names and other information that can identify the applicant’s gender, race, or other protected characteristics to ensure hiring managers are focusing solely on the qualifications and experiences of the candidate. When it comes to promotions, the criteria should be based on measurable performance indicators and communicated to all eligible employees.
• Incorporate Non-Discrimination Policy Into DEI. Most employers have a separate non-discrimination policy, but such policies are not always incorporated into a DEI policy. Make non-discrimination a core component of DEI policies.
• Align DEI Goals with Business Objectives: DEI should not be a standalone initiative. Instead, it should be integrated into the overall business strategy. For example, if a company’s goal is to innovate, diverse perspectives can fuel creativity and lead to innovative solutions.

Despite the backlash and legal challenges, the moral and business case for DEI remains strong.

The controversy surrounding DEI highlights the need for thoughtful and inclusive implementation.

It is not enough to simply advocate for DEI; we must strive to get it right.

By adopting a proactive stance, employers can foster an environment that is more inclusive and equitable, benefiting all employees.

[NOTE: This article first appeared as Guest Commentary on Pacific Coast Business Times on September 26, 2024.]