How the Affirmative Action Ruling Does (And Does Not) Impact Employers

How the Supreme Court Ruling Affects Employment Regulations

First and foremost, the Supreme Court’s joint ruling in Students for Fair Admission, Inc. vs. Harvard and the University of North Carolina does not alter existing employment regulations. 

“It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace,” U.S. Equal Opportunity Employment Commission Chair Charlotte A. Burrows said in a public statement on the ruling. 

Although the phrase ‘affirmative action’ is used to describe recruitment practices in both higher education admissions and professional talent recruitment, they are separate processes governed by different regulations.

Recruitment, training, promotions and other employment matters are governed by Title VII of the The Civil Rights Act, which prohibits discrimination based on race, religion, sex, national origin, or sexual orientation. 

As race cannot be considered as a part of employment decisions in the vast majority of cases, organizations are instead encouraged to ‘act affirmatively’ to foster a diverse workforce and welcoming environment. This allows them to intentionally remove barriers to diversity, such as providing training on implicit biases or recruiting at specific colleges to increase candidate diversity.

Affirmative action in higher education, on the other hand, allowed race to be considered when evaluating whether or not to accept an applicant into a college or university. Since it operated under separate regulations, the court's decision to strike it down does not immediately impact affirmative action in employment.  

Diversity Talent Programs Under Scrutiny

Even though the ruling does not change existing employment regulations, it opens the door to significant implications for employers down the road. Legal experts anticipate employers’ Diversity, Equity, Inclusion and Belonging (DEIB) initiatives will be subject to additional scrutiny, from both companies themselves and conservative advocates filing legal challenges workplace diversity programs increases. 

As the chief legal officer for recruiting platform Handshake, Valerie Capers Workman, tells Axios: "[Companies] should expect some litigation… That doesn't mean that the litigation will have merit, but it does mean that companies will probably have to spend some money defending claims that they otherwise would not have."

Even before ruling, the nonprofit group America First Legal — led by Trump White House advisor Stephen Miller — filed complaints with the U.S. Equal Employment Opportunity Commission (EEOC) over the diversity hiring practices of several major companies, including Morgan Staley, Hersey, BlackRock, McDonalds, Anheuser-Busch, and Lyft.

These litigation concerns have prompted some companies to conduct internal reviews of their DEBI practices to ensure compliance with existing regulations. 

“It really creates an impetus for employers to reaffirm their commitment to diversity, but to do so in a way that mitigates the potential of challenge down the line,” Tim Bartl, the CEO of the HR Policy Association, tells POLITICO.

Experts note that proceeding with caution does not mean abandoning DEIB efforts. “What I have been trying to urge my clients to think about is that you do not want to become overly compliant,” Alvin Tillery, Northwestern University political science professor and Fortune 500 diversity consultant, says in the Washington Post. “...[D]o not let your corporate counsel just say, ‘Oh, that is a wrap.’”

After all, this potential litigation risk co-exists with the existing possibility of facing legal action for discrimination. As reported by The New York Times: “In the end, companies appear to face a greater threat of litigation over discrimination against members of minority groups than from litigation over discrimination against white people,” with 89% race-based complaints filed with the EEOC in 2021 concerning discrimination against non-White people. 

Additional regulations may arise in the near future that further limit DEIB initiatives. Florida and Texas instituted laws in recent years restricting diversity training and programs for staff at public universities.

Concerns Rise About Long-Term Talent Pool Diversity

College admissions processes that do not account for race and ethnicity are expected to lead to a less diverse selection of job candidates. States such as California that have previously banned racial considerations in college admissions experienced a drop in student diversity. This then limits the number of non-White candidates with the four year degree required by many employers.

More than 60 companies, including Starbucks and Google's parent company Alphabet, filed an amicus brief before the decision encouraging the court to maintain affirmative action to support talent pool diversity. 

The HR Policy Association did so as well, saying: “the increasing demand of American companies for educated, trained, diverse talent necessitates a continuous pipeline of such talent from college campuses around the United States," a task which “requires admissions processes that provide opportunities for students of all backgrounds to achieve a higher education."

Companies that are ethnically and culturally diverse have been shown to out-earn less diverse companies by 36%. Still, Whites remain the majority in all occupational groups, according to U.S. Bureau of Labor Statistics data — even as they are expected to comprise less than half of the American population by 2045.

Organizations looking to cultivate a varied candidate pool going forward may need to adjust their recruitment practices. While recruiting at HBCUs and other traditionally diverse environments can support these goals, companies can also look for ability indicators outside of four-year degrees, such as digital certifications and skill-based experience.