Turning DEI policies into aspirations unlikely to stem bias lawsuits

An anti-bias health care group called Do No Harm is going after Pfizer even though the pharmaceutical giant, in response to a lawsuit the group filed against it last year, eliminated race-based eligibility requirements for a diversity fellowship.  

“They’re continuing the illegality,” Cameron Norris, an attorney with Consovoy McCarthy that’s representing the group, says in a Reuters report

Pfizer won dismissal of the lawsuit by arguing the group lacked standing to sue because none of its members could show they intended to apply for the diversity fellowship. Notwithstanding the victory, Pfizer opened up the fellowship to all applicants, saying it would no longer factor in race in deciding who should get funding under the fellowship. 

That softening of its program hasn’t stopped the anti-bias group from appealing its loss. “The program is only nominally race neutral” after the change, Norris says. 

Rethinking DEI

A number of companies have pulled back on their DEI initiatives since the U.S. Supreme Court last year in a landmark decision said affirmative action in university admissions is discriminatory. Although the decision doesn’t apply to companies, conservative anti-bias groups have leaned heavily on it in their challenges to corporate DEI programs. 

“This decision just really injected new life into the whole debate,” Dan Lennington, an attorney with the Wisconsin Institute for Law and Liberty, an anti-DEI group, told the Associated Press.

Advisors say corporate DEI programs are just as legal now as they were prior to the Supreme Court decision, but it’s nevertheless a good idea for companies to replace explicit hiring quotas with something softer if they’re concerned their diversity efforts could attract legal challenges.

“A program that tries to establish a fixed goal — a quota — for minority hiring or minority contracting is going to be much more vulnerable than a plan that doesn’t use numerical targets,” Samir Deger-Sen, an attorney with Latham & Watkins, has said. “There’s a new climate and we can expect there are going to be challenges.”

Softened approach

Like Pfizer, Comcast last year expanded a grant program, called RISE, to all applicants after settling a lawsuit with the Wisconsin Institute that accused the program, originally intended for minority applicants, of being discriminatory.  

“Comcast abandoned the Comcast RISE program [and] entered into a confidential settlement agreement with [the Wisconsin Institute’s] clients,” the group said in announcing the settlement. 

Lennington told AP that the Comcast settlement is a move in the right direction but it’s not the kind of broad-based win that it’s looking for. To get the win it really wants, it sued the U.S. Department of Transportation late last year on behalf of two small construction companies to dismantle the agency’s Disadvantaged Business Enterprise program. 

That program, signed into law in 1983 by Ronald Reagan, requires 10% of federal highway and transit funds to go to women- and minority-owned small businesses. But the Wisconsin Institute says the set-aside violates the Constitution’s equal protection guarantee. 

“It’s time for discrimination to end,” Lennington said in announcing the lawsuit. “Our clients are hardworking small business owners who just want to build roads … but time and time again, they lose out on business because of their race and gender.”

Legal gray area

Ending numerical hiring goals will likely help companies avoid lawsuits, but it won’t stop them. And, if a company does get sued, having aspirational goals rather than explicit numbers will make it harder for plaintiffs to prevail, specialists say. 

“It could be hard to prove discrimination just because a company ‘announced in a really broad way that it would be nice to have more people of color in management,’” the AP report says, referencing comments from David Glasgow of New York University’s School of Law. 

DEI programs that are based on broad principles rather than numerical goals are in a “gray area” of law, Glasgow says, leaving court’s with wide latitude in how they interpret whether a company is violating the law. 

“Plaintiffs could try to argue that diversity, equity and inclusion policies are pressuring hiring managers to make race-based decisions” even if there are no fixed goals, the AP report says. 

Bottom line: “Even if you have a program that is not technically using race as a plus factor, in some explicit way, if it tries to do so in a way that is, in an implicit way, really focused on race … that could be subject to challenge,” Deger-Sen says.