DEI faces ‘delicate and uncomfortable environment,’ SHRM panelists say

The past few years have brought radical changes to the employment landscape, and among them is last year’s U.S. Supreme Court decision holding that race-conscious college admission policies violate the Constitution.

During a June 24 presentation at the Society for Human Resource Management’s annual conference in Chicago, attorneys Victoria Lipnic, Jonathan Segal and Rae Vann discussed what the ruling portends for employers.

“I know those of you in HR know this: Diversity is happening faster than what was expected,” Lipnic, a partner at Resolution Economics and former acting chair of the U.S. Equal Employment Opportunity Commission, told the audience.

Based on the 2020 census, roughly 4 out of 10 Americans identify as non-White, according to presentation handouts. This is a significant change from the 1980 census, where 80% of the U.S. population identified as White.

The workforce, reflecting the shift, is changing, too, along with the applicant pool, Lipnic pointed out. Younger workers are more diverse, as is the younger population generally. At the same time, the overall workforce population is aging, she noted.

Against this backdrop, “there is a strong, documented case for diversity, not just qualitatively, but quantitatively,” Lipnic said. For example, “companies that have diverse C-suite representation do better business-wise,” but there’s also increasing pressure on executives to account for their practices, she added.

Yet, in seeming tension with the business need for diversity and the country’s shifting demographics is the litigation spawned by the high court’s ruling in the college admissions case, Students for Fair Admissions v. Harvard, the SHRM panel observed.

The decision “effectively prohibited the use of race as a ‘plus’ factor in student admissions by both private and public academic institutions,” Segal, a partner with Duane Morris, wrote last year in an op-ed to HR Dive.

The ruling doesn’t change the law with respect to workplace DEI practices because it’s generally been unlawful “for employers to consider race, gender, or another Title VII characteristic as a ‘plus’ factor even where the goal is to increase diversity,” Segal wrote.

But the case “has influenced aspects of race-conscious initiatives and created a backlash against DEI&A objectives,” Vann, head of labor and employment for Wayfair and past general counsel to the Center for Workplace Compliance, formerly the Equal Employment Advisory Council, said during the presentation.

This points to a “delicate and uncomfortable environment,” Vann added.

Supporters of the ruling are now trying to figure out how they can secure a similar win in the context of Title VII, Vann said. They’re looking for a test case by challenging employer practices in four areas:

  • DEI programs that encourage hiring and promotion of underrepresented individuals.
  • Diversity training that portrays White individuals as the “bad guys.”
  • Individual suits by employees who lose their job or are denied a promotion and complain they were replaced by someone because of diversity goals.
  • Shareholder or activist lawsuits targeting corporate DEI policies or initiatives, or efforts by state government leaders to clamp down on DEI programs in public education and employment.

Those are all the more reason for HR to pay attention to what employers can’t do, Lipnic said. During the panel, Segal highlighted three practices that are prohibited by Title VII:

  • Quotas. Employers can’t say, for example, “I want 30% of the workforce to be Black or female.”
  • Set asides. If an employer has seven executives and one resigns, it can’t “set aside” the opening for someone because of their race, gender or other Title VII factor.
  • Preferences. For instance, if two candidates are equally qualified for an open role, an employer can’t offer it to one because of their race, gender or other Title VII factor.

The panelists also cautioned against a fourth practice: tying management compensation to quantitative diversity goals. Giving executives a financial incentive to make employment decisions on the basis of race or other Title VII factors can heighten the risk of litigation, they said.

However, talent acquisition teams can still rely on longstanding practices, such as choosing to advertise and recruit in places that supplement, widen and diversify their applicant pools, the panelists pointed out. TA teams can also focus on qualifications like experience, Vann said, so long as they stay away from Title VII factors.