For the past few months, a concerning number of companies in the US have been forced to reassess their diversity, equity and inclusion (DEI) initiatives and policies.
Powerful conservative groups have take a number of high-profile companies to court, claiming that DEI programs and policies breach Title VII of the 1964 Civil Rights Act, which prohibits racial discrimination in the hiring process.
The law was originally designed to prevent discrimination on the basis of sex, race, religion and national origin in hiring, promoting and dismissal, as well as tackle the issue of desegregation of schools. Recently, it has been mobilised by conservative anti-affirmative action groups determined to get rid of programs specifically designed to counter unconscious bias in corporate hiring process.
The anti-affirmative action movement has gained momentum after a Supreme Court decision last year that ended race-conscious affirmative action in college admissions programs. The ruling was a blow to decades’ long race-conscious admissions schemes, aimed at diversifying the student population of the country’s most elite ivy-league colleges.
These groups have also been boosted by their successful campaign to oust Claudine Gay, Harvard’s first Black president of Harvard, who had the shortest tenure in the university’s 388-year history after stepping down from her role in the first week of 2024 after just six months. Late last year, Gay was accused of antisemitism and plagiarism in her academic work by conservative online journal, The Washington Free Beacon.
On January 2, Gay resigned from her role as the first Black woman to serve as president of Harvard. A week later, she penned an Op Ed in the New York Times, warning of “a broader war to unravel public faith in pillars of American society”.
“Trusted institutions of all types – from public health agencies to news organisations – will continue to fall victim to coordinated attempts to undermine their legitimacy and ruin their leaders’ credibility,” Gay wrote.
One of the main agitators in forcing Gay to step down said his primary objective is to “eliminate the DEI bureaucracy in every institution in America and to restore truth rather than racialist ideology as the guiding principle of America.”
In the past year, a number of prolific anti-DEI groups have undertaken this agenda with aggression and fervour. In their attempts to shut down DEI initiatives and programs that have clear race-based eligibility components, conservative groups are claiming that DEI policies force hiring managers to make race-based decisions — therefore breaking the law.
These groups insist that DEI initiatives constitute discriminatory hiring practices. And a growing number of them are taking legal action to see that these programs are erased.
The American Alliance for Equal Rights cited section 1981 of Civil Rights Act of 1866 to go after The Fearless Fund — a venture capital fund which invests in businesses owned by women of colour.
Virginia-based medical advocacy group Do No Harm filed a lawsuit earlier this month against the National Association of Emergency Medical Technicians, claiming that the association’s “diversity scholarship,” which is only awarded to students of colour constitutes “racial discrimination.”
On its website, Do No Harm states that its mission is to “protect healthcare from the disastrous consequences of identity politics” and file federal civil rights complaints to challenge “medical schools…[that] offer scholarships and programs that illegally discriminate based on sex, gender identity, race/ethnicity, colour or national origin.”
In December, The Wisconsin Institute for Law & Liberty sued the State Bar of Wisconsin, asserting its diversity fellowship program for law students breaches the free speech rights of bar members whose fees are used to fund it.
America First Legal announced it was “putting woke corporations, law firms, and hospitals on notice that all DEI programs, and all “balancing” in employment, training, scholarships, and promotions, based on race, national origin, or sex are illegal.”
“Such programs have violated the law since their inception, but based on [last June’s] Supreme Court decision, there is no excuse for them going forward,” a statement posted on the organisation’s website reads.
In recent months, the world’s biggest companies have been modifying their DEI policies. Giants including JPMorgan Chase, American Airlines, Lowe’s and Pizza Hut operator Yum! Brands have altered, or in some cases even cut their DEI programs, amid claims their programs constitute “illegal discrimination and a breach of the directors’ duties to investors.”
Google, Nike, Amazon and Meta have reduced their DEI departments. According to a source obtained by CNBC, Google and Meta also made cuts to staff members responsible for recruiting underrepresented people.
Are companies really breaking the law by having initiatives that aim to increase Black and other minority representation? Are they breaking the law when these initiatives are simply trying to widen their candidate pools and erase bias in the hiring process?
Could there be other reasons for the cuts? Recent research by Indeed revealed that over a third of employers cited cost and budget constraints as the main reason why DEI efforts were being put on the back burner.
What about here in Australia?
Jasleen Kaur, Senior Principal, HR Advisory at Gartner, believes that here in Australia, DEI initiatives remain critical and that they are driven by greater involvement and accountability from boards.
“The consequences of not prioritising diversity or getting it wrong can be severe, so it is up to HR to make a persuasive case,” Kaur said in August, citing Gartner research that showed diverse and inclusive teams perform 1.4 times better than those that are not.
The research also revealed that organisations with sustainable DEI strategies benefit from significant differences when it comes to talent outcomes, including employee performance, on-the-job effort and intent to stay.
“Gartner research indicates that 56 per cent of full-time employees believe it’s very important that their workplace is ethnically, racially or culturally diverse,” Kaur said. “An inclusive environment is more likely to attract and retain workers, with employees more productive in a positive work culture.”
“Establishing a positive work culture requires a whole of organisation commitment…[a] board’s involvement is central to the effectiveness of any DEI initiative.”
A Randstad Enterprise Talent Trends Report from 2023 delivered some good news about the state of DEI programs in Australia.
According to the report, which surveyed more than 900 C-suite and HR leaders in 18 markets, 90 per cent of business and HR leaders in Australia have confirmed that DEI is embedded in their talent strategy. The survey also found that almost half of Australian jobseekers say they will not join a company that isn’t making an effort to improve its DEI initiatives.
Anthea Collier, APAC Managing Director, RPO & MSP; interim Country Head of Australia, Randstad Enterprise, said in April, “Now’s the time (when your competitors are potentially cutting budgets) to properly embed your DEI strategy into your organisation’s talent infrastructure and blueprint, so you can access a broader and more diverse talent pool to help overcome the talent shortage and reap the rewards in retention.”