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Law Firms Under Scrutiny: Legal Implications of Diversity, Equity & Inclusion Initiatives

4 min read

Two Arkansas elected officials are warning law firms and other companies that they could be breaking the law with their diversity, equity and inclusion programs in light of a recent U.S. Supreme Court decision involving college admission practices.

But legal experts say that there is a difference between corporate DEI programs and university admissions, and that as long as company programs avoid quotas, their legal jeopardy is slight.

“It’s one thing to say we strive to have a racially or gender-diverse workplace and recognize the benefits of having diversity in the workplace,” said Stuart Jackson, a partner at Wright Lindsey Jennings. “But it’s quite another to say we’re going to hire this type of person for this spot and not consider anyone else.”

Jackson, a member of the Little Rock law firm’s labor and employment team, said he has no problem with well-thought-out DEI policies. “Aspirational is the better way to go because you do leave yourself open to allegations of race discrimination, or gender discrimination, or other types of discrimination if you go beyond something that’s aspirational,” he said.

In the wake of the U.S. Supreme Court ruling in July that struck down the race-based admissions policies of Harvard University and the University of North Carolina, elected officials sent law firms and companies across the country letters warning them that providing different treatment based on race is against the law.

“Congress will increasingly use its oversight powers — and private individuals and organizations will increasingly use the courts — to scrutinize the proliferation of race-based employment practices,” U.S. Sen. Tom Cotton, R-Ark., wrote in a July 17 letter to 51 law firms. “To the extent that your firm continues to advise clients regarding DEI programs or operate one of your own, both you and those clients should take care to preserve relevant documents in anticipation of investigations and litigation.”

Cotton said in an email statement to Arkansas Business that “unfortunately,” many DEI initiatives treat people differently based on race.

“The Supreme Court’s ruling that ended affirmative action in education will no doubt impact similar programs in corporate America,” he said. “Law firms — many of which supported these unpopular and illegal programs — have a duty to inform their clients about legal trouble, congressional oversight, and legislation related to racial discrimination in DEI programs.”

Arkansas Attorney General Tim Griffin was one of five state attorneys general who sent letters to the top 100 law firms in the country reminding them that they have a duty to avoid discriminating on the basis of race, whether it’s under the label of DEI or otherwise.

“Put simply, differential treatment based on race and skin color, even for purportedly ‘benign’ purposes, is unlawful, divisive, and exposes your firm to serious legal consequences, including potentially fines, damages, and injunctive relief,” the attorneys general wrote in the Aug. 29 letter.

Griffin said in a statement to Arkansas Business that attorneys general routinely provide guidance on the law, and this case isn’t different.

“Your interest in the joint letter is a sign that we are raising awareness on the issue of racial discrimination,” he wrote, adding that he hopes companies will “abide by recent Supreme Court precedent.”

But attorney Chris Burks of the law firm WH Law of North Little Rock, whose practice includes employment law, said the letter was politically motivated. “It’s outrageous for the Arkansas attorney general to suggest to these private businesses that they’re violating the law when in my view they’re not violating the law,” Burks said. “The attorney general is intentionally misreading the Harvard case, which is about higher education, and applying that to private businesses.”

Burks said he’s seen no evidence of strict quotas in hiring lawyers.

“And this letter, and a lot of the background behind it, is not about treating everyone equally,” Burks said. “It’s about treating white people better, because that is what’s politically popular at the moment.

“And as lawyers, that’s antithetical to who we are because our profession is about treating everyone equally,” he said. “I think it’s sad.”

Jackson said the Supreme Court case doesn’t change what he’s telling his clients. The Civil Rights Act of 1964 made it clear that race should not be a factor in employment decisions — and it protects everyone.

“I want my clients to be focused on the merits of a hire, and not taking into account any protected category, like race or age or gender or disability,” he said. “I want them focused on finding the most qualified candidate.”

People who allege they didn’t land a job because of their age, race or gender will have a heavy burden proving that they were more qualified than the successful applicant in order to win a discrimination suit.

“It’s not enough for me to just say, I’m as qualified as that person, why didn’t I get the job?” Jackson said. “I’ve got to prove that I’m objectively more qualified than the successful applicant, and I still didn’t get the job.”

Even if a larger company wants its DEI policy to say that it is going to take steps to ensure that it has diversity in its workforce, it could be legal if the company focuses on experiences and qualities that are not necessarily race or gender-based when hiring, Jackson said.

Judges give employers a fair amount of deference when it comes to making hiring decisions and that includes setting job requirements, job duties and the types of background experiences they may want from an employee.

“Courts typically will say the employer gets to weigh that and make a decision and decide who it feels is the most qualified applicant,” Jackson said.

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