Rethinking Diversity Programs: A Legal Perspective

Conservative Group Drops Lawsuit After Changes to Diversity Criteria
 

Businesses have reevaluated their eligibility criteria for racial diversity and inclusion programs to shield themselves from legal challenges. Recently, this strategic maneuver yielded success when the American Alliance for Equal Rights, led by conservative activist Edward Blum, withdrew its discrimination lawsuit against Morrison & Foerster LLP. This noteworthy development came after the law firm removed the phrase "underrepresented groups" from its diversity program criteria. Moreover, other firms grappling with legal actions, such as Gibson, Dunn & Crutcher LLP, and Perkins Coie LLP, have also embraced similar revisions.
 
Pfizer Inc. employed a parallel strategy in response to a discrimination lawsuit by the activist group Do No Harm. Pfizer adjusted its Breakthrough Fellowship criteria, effectively allowing applicants to apply "regardless of whether" they belong to specific minority groups. This change was noticed, as federal appeals court judges in New York indicated during oral arguments on October 3rd that the lawsuit against Pfizer might become moot due to these language alterations.
 
Navigating Legal Challenges for Corporate DEI Programs
 
Amidst a changing legal landscape, companies proactively seek avenues to safeguard their diversity, equity, and inclusion (DEI) programs from potential lawsuits under Title VII of the Civil Rights Act of 1964 and Section 1981 of the 1866 Civil Rights Act. This undertaking has become increasingly imperative since the U.S. Supreme Court decided to invalidate affirmative action in college admissions. Legal experts and academics opine that this ruling has paved the way for additional litigation, emphasizing discrimination against non-marginalized groups, including White men.
 
Ann McGinley, an esteemed employment law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, expressed the dilemma facing corporate America, stating, "It’s a very odd place to be, to be in corporate America and trying to do something that they think is the right thing, and yet being worried about whether that’s legal or not."
 
Changing Eligibility Language
 
In response to legal challenges, Morrison & Foerster made pivotal changes to its Keith Wetmore Fellowship for Excellence, Diversity, and Inclusion. Formerly, the program stipulated that it was exclusively for first-year law students "who are members of historically underrepresented groups in the legal industry." The new language seeks students who demonstrate a "commitment to diversity and inclusion in the legal profession."
 
As a result, the lawsuit against the firm was dismissed, with the understanding that Morrison & Foerster would not revert to its previous eligibility language and would no longer require fellowship applicants to disclose their race. This agreement was formalized in the U.S. District Court for the Southern District of Florida, eliciting a contented response from Eric T. McGrath, chair of Morrison & Foerster, who stated, "We are pleased by the AAER’s decision not to pursue a meritless case."
 
Strategic Implications for Companies Facing Legal Challenges
 
Adam Herzog, an attorney at Katz Banks Kumin LLP, suggested that Morrison Foerster and Perkins Coie found themselves in the crosshairs due to their specific eligibility criteria naming certain groups. This departure from more conventional language, which typically alludes to broader categories like "historically underrepresented groups," made them noteworthy targets for legal action.
 
Modifying the language of their DEI programs may offer Perkins Coie and Pfizer a potential avenue for having the cases against them dismissed. The American Alliance for Equal Rights sought a permanent injunction, mandating these firms to establish "strictly race-neutral" program eligibility requirements. It is anticipated that companies confronted with similar allegations will follow suit, amending their language and contending that the complaint has become moot since there is "no longer an injury that a lawsuit can remedy," as posited by Herzog.
 
During the oral arguments in the Pfizer case, Judge Dennis Jacobs of the U.S. Court of Appeals for the Second Circuit emphasized that nothing now prohibits non-minority members of Do No Harm from applying to the fellowship due to the company's altered wording. Judge Beth Robinson noted that arguing for mootness based on language changes is Pfizer's "logical play" in the litigation.
 
However, this argument must still be tested in a court of law. Ann McGinley was skeptical, saying, "I would be very surprised that a court would find that to be moot because they could turn around and change it." Pfizer's representatives have yet to respond to requests for comment regarding the language changes and the ongoing lawsuit.