In the aftermath of the protests and civil unrest of 2021, more and more businesses embraced what has come to be known as “diversity, equity, and inclusion,” or DEI.  Today, most people have at least some general understanding of what DEI is about.  For many businesses DEI represents a commitment to promote diversity and equitable outcomes among races, genders, etc. while fostering inclusion of otherwise “underrepresented communities,” in their organization. As a concept it all sounds well and good. However, as with most newly drawn plans, the challenges come to light at the execution stage. Despite their well-intended motives, many businesses are finding themselves embroiled in litigation over efforts to implement DEI in their workplaces. It seems achieving equity and harmony among the varieties of people that make up most workforces, is complicated. It turns out that DEI may be causing as many problems as it seeks to solve. The Supreme Court’s recent ruling in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (2023), is a poignant example.  There, the Court essentially held that university and college admissions that used color, race, national origin, etc. to determine eligibility (promote diversity), unlawfully discriminate against those who inevitably must be screened out for the color of their skin, race, national origin, etc. As Justice Roberts noted in the Court’s opinion, “Many universities have for too long wrongly concluded that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned, but the color of their skin.” “This nation’s constitutional history does not tolerate that choice.”

 The following is a list (far from exhaustive) of some of the litigation, legislation, or legal wranglings that has evolved in the wake of the rush to adopt DEI policies or actions taken in the spirit of DEI:  

• In April a conservative legal group called the America First Legal Foundation, urged the EEOC to investigate Mars Inc.’s hiring practices out of concern that its commitment to cultivating the careers of women and people of color, was itself discriminatory by excluding men and people not of color.
  • The law is clear in this regard – favoring one applicant over another based on gender, color, or other protected characteristics, is prohibited by Title VII of the Civil Rights Act of 1964. Having a goal of promoting women and people of color, however well intended, does not provide a defense to a discrimination claim.
    
• In May a former Novant Health executive sought to uphold his multi-million-dollar jury verdict in his race and sex discrimination lawsuit accusing the company of firing him for being a white male. The jury was presented with evidence that the plaintiff was fired without notice as part of the company’s diversity push, despite his 5 years with favorable performance reviews. He was also among seven white Novant Health executives replaced by women or black men.
  • The case was based on circumstantial evidence and obviously the compelling data on fired white male executives and their replacements, contributed to the jury’s decision. While no one can know if any of the challenged decisions were based on race and/or gender, the appearance that it did based on the data did not sit well with the jury. Employers must be mindful of how their decisions appear (i.e. “optics”) just as much as their substance.
    
• In June, a New Jersey jury awarded a former regional director of Starbucks $25.6 million in damages in a race discrimination lawsuit claiming she was discharged because she is white. The discharge was among a number of extreme measures taken by Starbucks following public outrage over the arrests of two black men at its store in Philadelphia, after they sat at a table without ordering anything while they waited for others to arrive for a business meeting. Starbucks conducted mandatory racial sensitivity training at all of its stores, nationwide, and fired the regional manager. At trial the plaintiff and her counsel claimed she was selected for termination based on the color of her skin, to serve as a white sacrificial lamb to bolster Starbucks’ image in the wake of a racial scandal in Philadelphia. However, the jury heard testimony from the black district manager directly responsible for the store where the arrests took place. He was not disciplined over the incident and testified that his white plaintiff regional supervisor was a very good regional manager who responded admirably to the crisis that unfolded in the wake of the arrests.  Plaintiff counsel argued to the jury that under the circumstances Starbucks could not possibly have disciplined a black employee due to the optics it would create, but that making a scapegoat of a white manager bolstered its zero tolerance of discrimination image even though it ruined hers.
  • The lesson of this case is one that many politicians who defunded police had to learn the hard way. When faced with a crisis sometimes a more measured and impactful response may be called for, rather than looking for a quick fix based on image and not the real problem.
    
• Meanwhile, Wells Fargo is facing a securities fraud lawsuit brought by investors who claim the bank’s publicized “diverse slate” policy was a sham to make the public think it supported DEI. The lawsuit alleges minority and other “diverse” candidates were sometimes interviewed for positions already filled, or otherwise that their interviews were a disingenuous plot to game the system and project a façade of diversification efforts. Wells Fargo has since suspended its policy pending further review and has acknowledged it is under investigation by federal authorities.
  • The lesson here? Don’t claim to be DEI friendly if it’s only for publicity or image. Not walking the talk may have a price.

And so we end where this article began: What to make of DEI in the workplace?  One lesson to take from the mounting backlash from those who are being adversely affected by DEI policies and decisions, is one that most of our mothers taught us as children – two wrongs don’t make a right. Perhaps one could add, “no matter how well intended, a second, reactive wrong may still be wrong to someone else.”

Questions? Contact attorney James Sherman at 952-746-1700 or by email.