Insights

The basic question in these cases is the legality of affirmative action in college admissions under federal law.

Specifically, can Harvard and the University of North Carolina (UNC) consider race as a factor in their admissions decisions under the equal protection and due process clauses of the U.S. Constitution, and Title VI of the Civil Rights Act of 1964?

The immediate legal effect of the Court’s decision will apply only to educational institutions.

But, depending on what the decision says, the implications could be much broader for all sorts of companies and organizations.

Based on the oral arguments and where the Court is on these issues, most observers think the Court is going to find that what Harvard and UNC are doing is unlawful. A different outcome would be a big surprise.

The real question is, in what way are they going to find it unlawful? There’s a range of ways, and we really won’t know until we read the opinion.

For instance, the Court could prohibit the consideration of race outright. Or it could restrict its use even more than the law currently does without totally prohibiting it.

So, the effect on universities and on companies down the road is really going to depend on what the Court’s reasoning is and how broadly or narrowly the opinion is written.

That said, I think we can expect a ruling that puts affirmative action and DEI programs under a legal microscope.

While colleges and universities will be the only institutions bound by Court’s decision, its implications could reverberate well into the legal framework that governs private employers and other institutions.

The affirmative action and DEI programs of private companies are governed by a different legal framework under Title VII of the Civil Rights Act and related state and federal anti-discrimination laws.

But like Title VI, which is at issue in these cases, those laws also prohibit discrimination on the basis of race. And courts often look to the one in interpreting the other.

So the thinking is if the Court does strike down Harvard’s and UNC’s programs, plaintiffs will use the decision to then bring similar challenges under the legal framework that does apply to private companies and other organizations.

Companies don’t want to overreact or abandon their values.

Diversity itself is not unconstitutional, and these decisions won’t change that. But institutions should consider positioning themselves in a more nuanced way.

Programs that lean heavily on race and other protected categories are going to raise red flags. Numerical quotas and specific consideration of race as a programmatic criterion are going to get attention.

Employers may want to emphasize things like life experience and the value of different perspectives. Anything that smacks of identity-based categories will be looked at very skeptically.

Organizations are going to want to be more creative in how they think about and implement DEI concepts.

Think about pathway programs like partnering with HBCUs or pipelines for first generation workers who are the first in their family to get a degree. Provide programs for people who come from certain socioeconomic backgrounds or geographic areas that have been historically underprivileged.

Think about qualifying criteria in those terms, rather than what we would call immutable characteristics.

Companies should also think beyond hiring and continue to focus on leadership development, retention, and the needs of their workforce, perhaps applying similar criteria to programs within the organization.

Companies should already be reviewing their DEI programs – taking a hard look at their substance, how they talk about them, how they think about and conceptualize them, how their managers talk about and implement them, and how they train their employees around all of those issues – to bring them into conformity with this new approach.

The legal impact will be immediate on educational institutions. And we can expect that plaintiffs targeting companies, assuming the Court invalidates race-based admissions, will move pretty quickly.

They’re likely framing up complaints right now, making use of the anticipated decision to structure similar challenges.

So employers could face litigation risk in fairly short order, depending on what their programs look like.

It’s going to take some time to see what lower courts do with those claims. It will take a while for those to work their way through the system. But it’s coming, and companies should already be meeting with their legal counsel and thinking about that sort of risk management.

There are other immediate strategic considerations as well, especially regarding the cultural effects of any changes and how companies demonstrate and communicate their values to employees, suppliers, consumers and investors.

Companies may want to look to states like Michigan, California and Washington – places that, under state law, already have tougher restrictions on public institutions regarding race-based admissions, hiring, and contracting – to get a sense of how they are coping and what approaches they have taken.

And I can’t overstate the importance of companies staying true to their culture. Remember that the legal issue before the Court here is one of race-based decision making. The ideas of diversity and sound business practices – hopefully those will never be unlawful, regardless of the makeup of the Court.