OPINION: DEI Backlash Has Made Companies Afraid Of Republican Lawsuits

DEI initiatives are often positioned by conservative activists like Chris Rufo and organizations like the Claremont Institute and the Manhattan Institute as “radical.” Other mainline Republicans argue that DEI is basically “reverse racism” against white people.

In December 2023, Johnny C. Taylor Jr, the president and chief executive of the Society of Human Resource Management, warned that diversity, equity, and inclusion initiatives would become a hot-button issue in 2024. Taylor told The Guardian that the momentum of the push for DEI initiatives that began after the murder of George Floyd had already started to fade.

“It’s going to become a hot-button issue this year,” Taylor claimed. “We’re already seeing companies go away from it.”

The 2023 Supreme Court ruling that turned over 50-plus years of affirmative action policy in higher education is the signal for reversing efforts to promote DEI. The policy was created in large part by admissions departments in order to make American colleges that had historically discriminated against Black students and students of color more amenable to admitting students from those backgrounds.

Though the SCOTUS ruling did not specifically mention corporate America, it has emboldened the conservatives who sought to dismantle affirmative action to bring the fight to DEI initiatives in the workplace.

As Vox reported, the genesis of DEI is actually the Civil Rights Movement. Several groups that had a vested interest in ensuring that public schools, housing, workplaces, and hiring practices were adequately desegregated after centuries of discrimination against Black people in American society put the term in the public lexicon, as well as in the vocabularies of both major political parties.

Bradford Vivian, a professor of communication arts and sciences at Pennsylvania State University and author of the book Campus Misinformation: The Real Threat to Free Speech in American Higher Education, told Vox that by the 1980s, American businesses “appropriated the ideas” because they saw how the concept benefited them.

“They realized there was a lot to be gained by actively recruiting those populations, hiring them, and getting new ideas in,” Vivian said.

Therefore, the backlash to DEI is unofficially another branch of the conservative culture wars; DEI initiatives are often positioned by conservative activists like Chris Rufo and organizations like the Claremont Institute and the Manhattan Institute as “radical.” Other mainline Republicans argue that DEI is basically “reverse racism” against white people. Rank-and-file Republicans and the activist wing of the party have been pushing for “race-neutral” approaches to policy, which are actually not race-neutral and end up assisting in discriminatory outcomes.

Following the Supreme Court’s dismantling of affirmative action, Republican politician Tom Cotton sent a letter to 51 law firms saying that DEI initiatives were now in murky waters legally. In June 2023, 13 Republican Attorneys General sent a letter to CEOs of Fortune 100 companies, claiming they promoted “racially discriminatory” practices and they should face legal consequences for doing so.

In addition to this, according to Fortune, in late September 2023, an Atlanta federal judge declined to block an attempt from the American Alliance for Equal Rights, the same group that successfully dismantled affirmative action, to stop The Fearless Fund, a VC that invests in women of color-led businesses, citing that the First Amendment protected those donations and thus the challenge would likely fail.

The Fearless Fund’s attempts to level the playing field for funding businesses led by Black women and other women of color. It provides them access to capital in the beginning stages of their funding, often helping those businesses scale up.

Despite the judge’s assurances that the Fearless Fund would be safe from the meddling of Republican activists, a three-judge federal appeals panel said that the Fearless Fund’s activities were “racially exclusionary,” claiming that the suit brought by Edward Blum’s group would succeed. Further arguments in the case will take place Jan. 31, but business owners like Sophia Danner-Okotie are in limbo. Danner-Okotie expressed her frustration, telling Fortune, “Am I going to be able to apply to grants like these? Are they even going to exist? With this last ruling, it seems like no.” Danner-Okotie had previously received a $10,000 grant from a separate Fearless Fund grant program.

Major companies like Disney and Starbucks have not changed their diversity, inclusion, and equity initiatives; instead, they have opted to fight and win court battles challenging their policies.

Other companies have been changing their eligibility requirements to avoid action from conservative activist groups. Pfizer, one of the manufacturers of the COVID-19 vaccine, adjusted its requirements for a fellowship program designed for college students of Black, Indigenous, and Latinx descent. The pharmaceutical company dropped the race-based requirements of its fellowship despite a judge dropping a lawsuit against the program. Similar to the challenge to the Fearless Fund, they face legal action from a conservative nonprofit, Do No Harm, which maintains that the change from Pfizer does nothing to change the program’s actual goals.

In an ironic twist, many of the lawsuits challenging these diversity programs hinge on a very specific reading of the Civil Rights Act of 1866, which prohibits racial discrimination in hiring contracts. The original intent and spirit of the law was to protect formerly enslaved people from being discriminated against during Reconstruction, but conservatives are using it to argue that programs designed to benefit Blacks and other people of color skirt the law.

The American Alliance for Equal Rights and Stephen Miller’s group, America First Legal, have been busy challenging DEI initiatives using similar logic. Miller’s group has been sending letters to the Equal Employment Opportunity Commission targeting everyone from American Airlines to Macy’s to IBM and maintains a list of “Woke Companies” on its website that it has complained about.

Joelle Emerson, the co-founder and CEO of Paradigm, a company focused on the application of diversity, equity, and inclusion in business, contextualized these attacks on DEI in an op-ed in January for Fortune.

“While it’s not surprising to see the pendulum swing back on DEI after two years of intense focus (throughout history, progress on the part of marginalized groups has often been met with backlash), it’s on all of us to decide how far it swings,” Emerson wrote. “The more that we can unite behind shared beliefs, the greater chances we’ll have in fighting back against a coordinated campaign that seeks to divide our nation and erase the civil rights progress we’ve made over the last two generations.”