Supreme Court Affirmative Action Decisions Provide Little Guidance for Employers
 
December 19, 2003
 
Erika Royal- Ft Lauderdale

For private employers wishing to promote diversity through voluntary affirmative action plans, the recent landmark U.S. Supreme Court decisions in Gratz v. Bollinger and Grutter v. Bollinger fail to offer much guidance.

At issue in both cases was whether the University of Michigan’s consideration of race in its admissions decisions violated a number of laws, including the Equal Protection Clause of the U.S. Constitution and Title VI of the Civil Rights Act of 1964, which prohibit recipients of federal assistance from discriminating on the basis of race, color or national origin.

In the Grutter decision, the Supreme Court affirmed the view expressed by Justice Powell in Regents of the University of California v. Bakke, establishing diversity as a “compelling state interest.” Specifically, the Court held that the University of Michigan Law School’s narrowly tailored use of race in admissions decisions – to further a compelling interest in obtaining the educational benefits that flow from a diverse student body – is not prohibited under the various civil rights laws.

However, in Gratz, the Court held that the admissions policy of the University of Michigan’s College of Literature, Science and the Arts (LSA), which automatically distributed 20 additional points to every single applicant from an “under-represented minority” based solely on race, violated the Equal Protection Clause. In contrast to its holding regarding the law school’s policy, the Court found that the LSA policy was not “narrowly tailored” to achieve the university’s interest in diversity. Instead, because the policy automatically awarded 20 points to each minority candidate, the Court found that it failed to allow the individualized consideration contemplated by Justice Powell in Bakke. Accordingly, the LSA policy did not survive the limits imposed by strict scrutiny.

Unfortunately, these recent Supreme Court decisions provide little practical guidance for employers. Generally, under the current legal framework, it is unlawful for employers to hire employees or make other employment decisions based on race, gender, national origin, religion or any other protected classification, even where the goal, workplace diversity, is a commendable one. Such preferences can expose an employer to possible liability under an array of federal and state civil rights laws, including Title VII of the Civil Rights Act of 1964. Thus, even before the recent Supreme Court decisions, employers faced possible reverse-discrimination suits stemming from affirmative action plans that established “targets” (read: quotas) based on numerical goals or percentages.

In United Steelworkers of America v. Weber, the Supreme Court held that Title VII’s prohibition against racial discrimination does not condemn all private, voluntary, race-conscious affirmative action plans. However, under the standards set forth in Weber and the EEOC guidelines, such plans can be implemented only to remedy past or present discrimination and cannot be intended solely to maintain racial balance.

Because the recent University of Michigan decisions do not address race as a factor in employment decisions, they fail to alleviate uncertainty as to the legitimacy of corporate affirmative action plans and diversity initiatives. On the one hand, the Supreme Court lauded diversity as a compelling interest, and noted the importance of diversity in the workplace as well. Acknowledging the numerous “friend of the court” briefs submitted by various American corporations, the Supreme Court recognized the importance of diversity in its Grutter decision: “Major American businesses have made clear that the skills needed in today’s increasingly global marketplace can only be developed through exposure to widely diverse people, cultures, ideas and viewpoints.” In fact, in its brief, General Motors asserted that a “well-educated, diverse workforce” that possesses “cross-cultural competence” is essential to maintaining America’s competitiveness in the increasingly diverse, global and interconnected world economy. GM noted that selective colleges and universities are not just the traditional route to the corporate world, they also “offer a large percentage of white students their first and last opportunity for significant contact with persons of other races and cultures prior to entering the working world.” The Supreme Court quoted from various corporate amicus briefs to rationalize its decision.

On the other hand, in the context of employment, Weber and the EEOC guidelines remain the governing law. The Grutter decision, while upholding the admissions policy of the University of Michigan Law School allowing preferences, fails to answer whether affirmative action plans or diversity initiatives may be implemented in the employment context for any purpose other than to remedy past or present discrimination.

Until the law on this issue is clarified, an employer seeking to preserve or establish voluntary affirmative action plans or diversity initiatives may take certain precautions to insulate itself from liability. First, an employer should determine the basis for its affirmative action plan and ensure that it is narrowly tailored to achieve those goals. These plans should not contain numerical targets or quotas as their objective. A system that already contains such numerical objectives, or that rewards managers for achieving diversity, should be well-defined and the measures for achieving success should be clear. Also, corporate communication materials like Web sites and employee manuals should be reviewed to eliminate any language that might suggest that the company discriminates against non-minorities. In light of the ambiguity created by the landmark Gratz and Grutter decisions, it is imperative for employers to review their affirmative action plans or other preferential selection programs to avoid legal risks.

For more information, e-mail Erika Royal at erika.royal@hklaw.com or call toll free, 1-888-688-8500.