Over the past two years, when Ishan Bhabha and his colleagues at the law firm Jenner & Block prepared the brief for the affirmative action case that the Supreme Court ruled on last year, Mr. Bhabha realized this: If a high school like Harvard While education institutions were the first to be the target of litigation about diversity, equity and inclusion, America’s corporate boardrooms were probably next.
Mr. Bhabha began working with dozens of Fortune 500 companies to evaluate their diversity programs and ensure they were on solid legal ground if they were sued.
Proponents of corporate diversity, equity and inclusion programs, commonly referred to as DEI, argue that they are critical to hiring and retaining people of color. Critics now argue that some such programs may unfairly exclude white and Asian people from recruitment processes.
In recent months, hundreds of companies have been re-examining those initiatives after a series of challenges to diversity programs: the threat of litigation in the wake of the Supreme Court’s decision to strike down race-aware college admissions, some from high levels of DEI. Criticism of the initiative high-profile business leaders, and a wave of layoffs in the tech industry that heavily impacted DEI teams.
This retaliation comes after more than 20 states passed or passed new laws targeting DEI initiatives last year — which has had a discouraging effect on some corporate DEI offices, according to diversity consultants.
“When the economy is booming and when the politics are favorable, we see a lot of growth in diversity programming,” said Frank Dobbin, an expert on DEI at Harvard and author of the 2022 book “Getting to Diversity.” “When either the political winds change — which is what’s happening right now — or there’s a recession, we’ve seen cuts.”
The backlash has led some HR professionals to keep their DEI efforts “under the radar,” said Dr. Dobbin. Dr. Dobbin said that at recent conferences he attended, corporate leaders discussed how to approach DEI “in a less face-to-face way.”
Some have considered moving away from initiatives that attract too much public attention, such as mandatory anti-bias training, and instead focusing on lower-profile DEI strategies, such as diversity task forces that convene various corporate departments. brings together the leaders of.
“If companies shine a light on ineffective things, that can be a good outcome,” Dr. Dobbin said, noting that mandatory anti-bias training sometimes makes bias worse. “But I’m worried the baby will be thrown out with the bathwater.”
As of now, some companies have cut down their programs due to the Supreme Court decision. Three-quarters of employers surveyed by employment law firm Littler Mendelson PC said they have not changed their approach toward DEI because of last year’s decision, and only 1 percent reported a significant reduction in their efforts, it said in a release. Month as per survey.
And some executives say they’re doubling down, like Crystal Castille-Cromedie, who leads DEI strategy for Hines, one of the world’s largest real estate companies. Ms. Castille-Cromedie joined the firm in June 2020, days after the killing of George Floyd, and has overseen a number of diverse efforts, including the creation of a mentorship program for underrepresented groups in real estate.
Mr. Bhabha, a partner at Jenner & Block and chair of the firm’s DEI Protection Task Force, said he has “some clients who say, ‘Look, if I got sued over this and I had to face defending DEI against it. There has to be a conservative response, I’d be happy to.” But, he added: “Most of my customers are not in that category. They think, ‘We’d like to keep our heads under the roof.'”
The American Alliance for Equal Rights, a conservative nonprofit dedicated to challenging race-based policies, sued a handful of law firms last year over their diversity fellowship programs, arguing that the programs Discriminates against white and Asian applicants.
The American Alliance’s founder, Edward Blum, also founded Students for Fair Admissions, the group that sued Harvard over its affirmative action policies and won.
Mr. Blum said, “These lawsuits send a powerful message to corporate America: The law firms you turn to for legal advice regarding DEI are themselves violating the law.”
American Alliance files lawsuit against law firms perkins koi, Morrison Foster and Winston & Strawn. Those companies have since opened their diversity fellowships to applicants of all races and backgrounds, and Mr. Blum’s group has withdrawn the suit.
“Following the Supreme Court’s landmark decision striking down race-conscious affirmative action in college admissions, we conducted a thorough review of our programs,” Winston & Strawn said in a statement. Perkins Coie said in its statement that the program’s revised criteria will continue to “ensure” that the firm hires lawyers “with diverse backgrounds and experiences.”
Morrison Foster said it was already in the process of opening the fellowship before the lawsuit.
In addition to the threat of litigation, some prominent business leaders have recently criticized diversity programs. Billionaire financier Bill Ackman wrote a Essay This month in The Free Press, following Claudine Gay’s resignation as Harvard president, she described what she called “the penetration of DEI ideology into corporate board rooms.” “Discrimination based on race, which is what DEI does, is literally the definition of racism,” Elon Musk wrote in a post on X. (Meanwhile, billionaire investor Mark Cuban wrote on X that “DEI-phobic companies’ loss is my gain,
Leaders who have been critical of specific types of diversity programs within the industry argue that blanket criticism of DEI can be counterproductive, distracting from meaningful efforts to improve corporate diversity initiatives.
“I have criticized our relative lack of metrics, our relative lack of accountability, the fact that leaders can issue DEI statements and otherwise do nothing,” said Lily Zheng, DEI strategist and author of “Reconstructing DEI” MX. ” , Zheng considers criticism of racial quotas to be focused on “a straw man of DEI”.
In 2020, following the wave of protests for racial justice in the wake of the killing of George Floyd, corporate DEI programs saw a wave of support, and hundreds of employers came forward to announce new diversity initiatives. In that year alone, companies spent an estimated $7.5 billion On DEI related efforts. But some DEI leaders say the focus and investment has not been sustained since then.
“It’s a Chinese mob phenomenon,” said John Amaechi, a retired basketball player who now works with companies on DEI strategy. “It produces a huge amount of energy followed by a return.”
In some cases, DEI programs have been hit hard by job cuts. Reveliolabsa workforce database, published a study last year that looked at 600 companies that have laid off employees since 2020 and found that people working in DEI had a higher attrition rate than employees in non-DEI roles. It was almost double.
Many executives still argue that their efforts to recruit diverse employees contribute to company performance. For example, Armughan Ahmed, chief executive of Appen, an artificial intelligence company, says that a diverse talent pool allows the company to create products that are trained on different users, thereby helping to prevent racial bias in AI algorithms. Is available.
Many corporate leaders agree with this idea.
“Even in places where anti-DEI legislation is being passed, it’s not about bailing out companies in any way, it’s about making them This is not to be done.” By over 1,000 companies. “It’s them realizing, ‘Okay, DEI work is still really important, so how do we work around this law?'”
The Supreme Court’s recent decision on race-conscious admissions policies does not apply directly to most employers. The decision focused primarily on Title VI of the Civil Rights Act of 1964, which covers institutions receiving federal funding and does not apply to most private companies. But many employers worry that their DEI initiatives could be legally challenged under Title VII, which deals with employment relations, or Section 1981 of the Civil Rights Act of 1866, which covers contracts.
Kenji Yoshino, director of the Meltzer Center for Diversity, Inclusion and Belonging at NYU School of Law, is advising managers at Fortune 500 companies to color code their DEI programs green, yellow or red. A red program indicates an initiative that has a high risk for potential litigation, such as a hiring process that provides advantages to candidates of color; On the other hand, a program that provides mentorship widely to anyone in the company may be classified as green.
Mr. Yoshino said some DEI critics have a limited view of what the programs include. Many corporate diversity programs extend beyond recruitment processes to touch mentoring, training and career development.
“Pessimists say, ‘This is a terrible moment for DEI, DEI is over, the sky is falling,’” Mr. Yoshino said. “I want to ask people what they think DEI really is.”