Although a recent Supreme Court ruling addressing the use of race in college admissions did not directly address employers, the decision likely will bring challenges to certain diversity, equity and inclusion practices in the business sector, particularly when it comes to hiring practices.
That’s according to experts from labor and employment law firm Fisher Phillips, who addressed the potential effects of the affirmative action decision on corporate DEI programs and hiring practices Wednesday during a webinar.
In the 6-3 ruling earlier this month, the High Court ruled that colleges and universities no longer could use face as a factor in their admissions decisions. The ruling could have implications for business owners, and Fisher Phillips advised that they should take a close look at their hiring practices and communication about DEI initiatives.
“It’s likely we’ll see a situation where the courts could challenge certain DEI practices using language that came out of this decision,” said Ray Perez, of counsel in the law firm’s corporate compliance and governance practice group.
DEI programs have existed for dozens of years at private employers and, when well-managed and maintained, can create an engaged workforce with members that bring diverse perspectives to help advance business objectives and improve decision-making, he said.
Such initiatives still will play a role in private settings, Perez said, noting that employees want to work at companies that espouse values similar to theirs, customers care about diversity in the firms they patronize, and shareholders find that such efforts help business operations.
Hiring implications
The Supreme Court decision could affect a company’s recruitment plans by reducing diverse student pipelines, forcing employers to think more about their recruiting efforts, Perez said, adding that firms may want to reconsider whether the schools that they traditionally target for recruitment still meet their needs for having a diverse applicant pool.
Employers that used a “balanced slate” approach to hiring, which required representation from underrepresented populations in the candidate pool, likely will attract more scrutiny and are more risky in the wake of the Supreme Court decision, according to Sheila Willis, a Fisher Phillips partner.
“Think about the language you’re using, in terms of meeting diversity goals,” Willis said, adding that having racial quotas are “100% illegal.”
The Supreme Court decision also may affect DEI programs related to training, mentoring and employee resource groups, according to Marilynn Schuyler, of counsel for Fisher Phillips.
Training should focus on the benefits of diversity and inclusion in the workplace and its importance to achieving business objectives. Mentoring designed to promote career development and employee resource groups (also known as business or affinity groups) should be open to everyone.
One of the most important aspects of DEI programs is how companies communicate about them, Perez said. Those communications can become Exhibit 1 in a lawsuit. He advised companies to be careful about using statements about benchmarks, being representative or having a particular goal surrounding different racial, ethnic, minority or underrepresented groups.
Among the communications to review, Perez said, are human capital management reports in Securities and Exchange Commission filings; environmental, social and governance reports that discuss diversity programs; diversity reports highlighting activity; company speeches; media interviews with executives; and recruiting documents.
“There is value to these programs,” he said, adding that companies should be strategic and intentional in how they describe what they’re doing. “Diversity can be a tool and an effective management practice that gets the most out of your employees in the workplace.”
Senior living’s commitment to DEI
The senior living industry has been at the forefront of implementing DEI initiatives.
Last year, Argentum, the American Seniors Housing Association and the National Investment Center for Seniors Housing & Care created the Senior Living DEIB Coalition in a commitment to promote diversity, equity, inclusion and belonging to businesses operating in senior living or allied to the industry.
The group also is creating a long-term action plan to support the development of tools, education and resources for senior living owners and operators to advance best practices in DEIB.
In 2021, Argentum signed the CEO Action for Diversity & Inclusion commitment, pledging the organization to create a diverse, equitable and inclusive workplace. Argentum also implemented a Diverse Leadership action, forming a coalition to work with a consultant to develop a long-term plan to provide guidance, support and encouragement to organizations seeking to create diverse, equal and inclusive companies and communities. The effort seeks to address the challenge of recruiting and retaining minority representation to executive-level positions.
