The US Supreme Court’s SFFA decision ending affirmative action in higher education continues to have ramifications for corporate America. Attacks to workplace DEI are gaining momentum with targeted challenges from a variety of angles, not the least of which are those coming from conservative advocacy groups filing lawsuits, requesting agency investigations and pursuing other complaints. Just last week, as many prepared to watch Taylor Swift’s boyfriend perform in the Super Bowl, America First Legal (a nonprofit founded by a former adviser to Donald Trump) filed an EEOC complaint against the NFL challenging the Rooney Rule, a widely used hiring practice that emanated in the NFL and is followed across corporate America. For in-house counsel, this just further emphasizes the need to continue to diligently monitor the changing DEI landscape for signals warranting targeted audits or adjustments to workplace DEI programming.
When should in-house counsel take action? Let’s start to answer that question by looking at where we are now and the escalation of events in the past 7 months.
Link to Timeline of Recent Material Attacks on Workplace ID&E Timeline of Recent Material Attacks on Workplace ID&E
Link to July 2023 | Letter to Employers from 13 State AGs July 2023 | Letter to Employers from 13 State AGs
Thirteen attorneys general used SFFA to support their opposition to corporate DEI programs (see letter to Fortune 100 CEOs here). In response, attorneys general from other states wrote to the same CEOs stating that SFFA “does not prohibit, or even impose new limits on, the ability of private employers to pursue diversity, equity, and inclusion.”
Link to August 2023 to Present | Conservative Action Group Starts Urging the EEOC to Investigate Corporations for Illegal Discrimination August 2023 to Present | Conservative Action Group Starts Urging the EEOC to Investigate Corporations for Illegal Discrimination
Last summer, America First Legal launched a barrage of attacks against dozens of companies (primarily in the tech and retail sectors) for using allegedly “unlawful diversity, equity, and inclusion practices to discriminate against American workers.” While AFL’s letters differ somewhat in substance, the common thread is the allegation that elements of companies’ DEI programs (including hiring, training, mentorship, partnerships, and public statements committing to diversity) constitute unlawful employment practices in violation of Title VII.
In December, AFL sent a letter to the EEOC urging the agency to investigate a large, multinational American technology company. The letter cited leaked video footage of statements from senior executives connecting executive pay to advancing diversity, equity, and inclusion practices as proof of alleged violations of Title VII of the Civil Rights Act of 1964. After the leaked video was posted to X, AFL pointed to the company’s 2022 ESG report which includes an “annual incentive program” intending to “continue to include a diversity modifier” affirming management’s commitment to DEI practices to “close the gap in executive representation,” which it claims is proof of illegal quotas.
The EEOC has not responded to any of these claims.
Link to January 2024 | DOL Becomes a New Venue for ID&E Attacks January 2024 | DOL Becomes a New Venue for ID&E Attacks
This month, AFL sent letters to the Office of Federal Contract Compliance Programs (and the EEOC) alleging a multinational healthcare company’s hiring goals are discriminatory, and asking the agencies to investigate. (The OFCCP is the agency charged with enforcing equal opportunity mandates for federal contractors.) As it had done previously, AFL released a leaked recording on X from a company executive describing their 5-year plan for hiring. In the letter, AFL alleges that their Diverse Slate Policy that asks the talent team to include “a minimum of one person of color and one female in each slate presented to a hiring leader” for each role creates “a culture of systemic racism.”
The OFCCP has not responded.
Link to February 2024 | Days Before the Super Bowl, AFL Calls Out the Rooney Rule February 2024 | Days Before the Super Bowl, AFL Calls Out the Rooney Rule
As mentioned, AFL’s latest target is the Rooney Rule. First adopted by the NFL in 2003, it initially required every team to interview at least one person of color when hiring a head coach or general manager. Through different iterations of this rule and other initiatives (read more here), NFL teams have diversified assistant coaching ranks and top front-office positions, including team presidents. Many companies have adopted some version of it, often called diverse slate initiatives, to help hire more talent from underrepresented groups. On February 6, AFL sent a letter to the EEOC requesting an investigation of the NFL for engaging in allegedly unlawful employment practices in violation Title VII of the Civil Rights Act of 1964 through their “adherence to application” of the Rooney Rule.
Link to Next Steps for Employers in a More Scrutinized Environment Next Steps for Employers in a More Scrutinized Environment
Given the intensifying attacks to corporate DEI programs (not to mention the politicization of such issues as we head into the presidential election), the time to consider adopting a framework to manage risk in this area now.
What does that look like (and how can we help)? Read on . . .
Link to A Three-Pronged Approach to Advancing DEI Efforts (While Mitigating Risk) A Three-Pronged Approach to Advancing DEI Efforts (While Mitigating Risk)
- Data, Data, Data! Establish a Compliant Structure for Data Collection and Management |The adage of “what gets measured, gets done” is still going strong in the DEI space. Accordingly, we understand companies’ need and desire to collect diversity data in the US and OUS. This requires a detailed legal understanding of what employers can collect and how. For fixed fees, we prepare up-to-date multijurisdictional charts to inform diversity data collection and management projects globally.
- Think of Your Annual Pay Equity Audit Like Your Annual Physical | It’s just smart. Stay ahead of any concerns about unexplained pay disparities with regular pay equity audits conducted under legal privilege to the fullest extent possible. We’re still tracking scores of headlines with allegations of gender pay discrimination. Plus, the global trend in increased pay equity-related reporting requirements (e.g. most recently in Brazil) is another reason regular pay equity audits are an easy solution.
- Invest in a Targeted DEI Health Check in 2024 | Given the shifting landscape described above, a privileged review of DEI programs can help to de-risk programs related to goals for workforce representation, encouraging a diverse talent pipeline, and offering supportive programs for all employees (among other things). We are happy to share our “due diligence” checklist with clients to help initiate a targeted audit to prioritize a review of the most vulnerable areas.
Please contact a member of our team to learn more.