A group of Democrat attorneys general are pushing back on the behalf of corporations, stating on Wednesday they would not be prosecuting companies for their diversity, equity, and inclusion (DEI) efforts.
The Supreme Court’s recent ruling against the use of race in the consideration of college applicants had a quick ripple effect, bringing on a legal challenge against Harvard for legacy preferences, as well as warnings to corporations coming from America First Legal (AFL), and 13 Republican attorneys general.
Now, 21 Democrat attorney generals have issued a letter to the Fortune 100 CEOs, assuring them their corporate diversity programs are “lawful and serve important business purposes.”
They applauded the companies’ DEI efforts as “ethically responsible, good for business, and good for building America’s workforce.”
“The letter you received from the 13 state attorneys general is intended to intimidate you into rolling back the progress many of you have made,” wrote Nevada Attorney General Aaron Ford. He was joined by attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.
Zero-Sum Race Factors
Prior to the ruling last month, in states without an affirmative action ban, universities that considered race did so in compliance with the decision set forth in Grutter v. Bollinger, which ruled that race could be used as a “plus” factor, but could never count against an applicant.
With the most recent ruling, the high court deemed it time to sunset Grutter. College admissions are necessarily “zero sum,” Chief Justice John Roberts wrote in the majority opinion (pdf). By benefitting some applicants on the basis of their race, it “necessarily advantages the former group at the expense of the latter.”
Justice Neil Gorsuch wrote in a concurring opinion that it was by definition discrimination “to treat that individual worse than others who are similarly situated.”
“And no one can doubt that both schools intentionally treat some applicants worse than others at least in part because of their race,” he wrote.
AFL put companies on notice the same day the ruling came out.
“AFL has documented in a plethora of Equal Employment Opportunity Commission (EEOC) complaints and board letters, many of the biggest corporations in America do exactly what the Civil Rights Act forbids. They use race and sex as a stereotype and as a negative, especially when it comes to heterosexual males, whites, Jews, and Asians, intentionally treating them worse than other job applicants and employees,” it stated, citing Amazon, Anheuser-Busch, Blackrock, Hershey, Nordstrom, and Unilever, among others.
The Republican attorneys general sent a letter to CEOs of Fortune 100 companies, including Coca-Cola, Microsoft, and Johnson & Johnson, writing, “We urge you to immediately cease any unlawful race-based quotas or preferences your company has adopted for its employment and contracting practices.”
“If you choose not to do so, know that you will be held accountable.”
A week after the Republicans’ letter, Democrat attorneys general sent their own to the same companies, assuring them they have reviewed the previous letter and that “the baseless assertion that any attempts to address racial disparity are by their very nature unlawful.”
Environmental, Social, and Corporate Governance
The efficacy of ESG, or environmental, social, and corporate governance, has been a recent concerns at the top levels of government. Spotlight fell on corporations’ willingness to lose money over making statements on environmental or social issues with recent Target and Bud Light boycotts.
The Democrat attorneys general maintain that these are legitimate efforts because they “help combat these inequities” driven by race. They asserted that “decades of discrimination” was reason to seek increased racial diversity through “race-neutral inclusion efforts” that cannot be termed “quotas.”
The letter, addressed to Fortune 100 CEOs, made mention of a statistic that only 12 percent of these CEOs were women and only 14 percent were not white, despite the companies’ workforces being 50 percent women and 40 percent not white.
“The impact this disparity has on women and communities of color cannot be overstated,” they wrote.
They made no mention of the shareholder losses caused by these efforts such as with the high profile Target and Anheuser-Busch cases.
“Affirmative efforts by private sector businesses to diversify their workforces remain vital both morally—to address past and present discrimination—and economically—to achieve a healthy economy and productive workforce,” they wrote.
The attorneys maintained that diversity ultimately resulted in productivity, a benefit to these companies’ bottom line, without naming any specific cases or companies.
“As a result of these efforts, corporate America has grown more diverse and more representative of American society. The economies of our states have likewise benefited from diversity and inclusion, as workers share their diverse beliefs, experiences, and ideas, becoming better informed, more creative, and ultimately, more productive.”
They added that it was misleading to use the recent Supreme Court case as basis to prosecute: “Irrespective of SFFA, hiring decisions made on the basis of race are prohibited under Title VII and have been for decades.
“Now more than ever, private sector employers play a crucial role in establishing and maintaining the societal and economic benefits of diversity.”