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Balancing the Risks of De-Prioritizing DEI Against the Backlash

Updated: Nov 20, 2023

Since June 29, 2023 I’ve read the U.S. Supreme Court’s opinion on race-conscious college admissions in SFFA v. Harvard approximately 2.5 times (2 full reads and a half-read representing a scan to re-read certain parts). The commentary that followed about the case being the death-nail in DEI efforts was totally baffling to me. And the data that showed how corporations were cutting their budgets to fund DEI programs and offices seemed to be such a premature (better yet, unwarranted) reaction. To do a sanity check on my own thinking, I pulled every relevant employment law I could think of to see if anything had drastically changed since my days of practicing law in this space. After all, I had not worked directly in the employment law and HR consulting spaces in over a decade, although I’d kept a close ear to the ground in my past time and stayed in contact with former colleagues, but had not heard any earth-shaking changes about the employment legal landscape. So the fury to de-prioritize DEI was simply mind-boggling.

Then, in September, three months after the High Court’s decision in SFFA on race-conscious college admissions, the NY State Bar validated (and to some degree, vindicated) my thinking with a release of recommendations by its Task Force on Diversity. In particular, the position taken on the risks related to dialing back efforts on DEI, as articulated in the report by the NY State Bar’s Task Force, is the message that compliance-driven, cost-conscious and sustainability-focused organizations need to hear.  Specifically, the Task Force cites three (3) key risks employers should consider when pushing DEI to the background or doing away with it altogether:

  1. potential for SEC investigations;

  2. policies or practices creating disparate treatment and disparate impact in the workplace; and,

  3. top talent losses or adverse impacts to financial performance.

I'll take each risk one by one in a separate blog post, but let's address the likely elephant in the room - the state by state legislative action that has resulted in 20+ states introducing over 40 bills to ban DEI efforts by framing DEI as a “divisive concept”.  To be clear, many of those legislative efforts failed, although 5 states have been successful with eliminating mandatory DEI training, outlawing diversity statements and closing (or forcing a rebranding of) DEI offices and roles. And most of the state-level legal action against DEI has targeted state agencies and state-funded education. Still, none of these legislative actions contemplated the risks associated with failing to proactively manage a diverse, equitable and inclusive workplace. Moreover, keep in mind that the SFFA decision only addresses college admissions, and more importantly, it addresses admissions processes at two particular universities, Harvard and University of North Carolina. So what should employers do?

The NY State Bar’s Task Force advocates “the need to balance the real and anticipated backlash against DEI efforts against the risks associated with private employers reducing or abandoning publicly disclosed DEI initiatives.” I concur and I’ll add that DEI messaging matters. How you shape that messaging can be guided by legal rationale from DEI-related court opinions. For example, the rationale the Court applied to conclude that Harvard's and UNC's college admissions processes ran afoul of the Equal Protection Clause is as follows:

  • the processes were not "sufficiently focused and lack[ed] measurable objectives warranting the use of race";

  • the processes used race in a negative manner or involved racial stereotyping; and,

  • the processes did not create a meaningful or logical end point for using race as a factor in the college admissions.

As noted, the above can be used as a guide for framing appropriate DEI messaging. Also, employment laws addressing disparities that adversely impact protected classes still exist to protect against discrimination. Therefore, connecting the dots between legal parameters and data-driven messaging will be a good starting point for balancing a path forward with DEI programs against the backlash that promotes DEI as divisive. If you lead with data, your DEI story will follow and you should be able to thereby color your story inside the legal lines of equal protection to mitigate risks of legal challenges. #HRcompliance #employmentlaw #DEI #datadriven #datastorytelling #equalprotection #messagingmatters #balancingrisks #mitigatingrisks #costavoidance #bottomline

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