In our latest NC Chamber Legal Institute Sidebar, we’re reviewing the Supreme Court’s recent decision related to affirmative action and how the ruling may impact employer hiring practices.

The university admissions cases, consolidated as Students for Fair Admissions v. Harvard, have been widely reported and written about since the decision came down on June 29.

The typical summary has been something on the order of, “high court conservatives strike down affirmative action.”  Notwithstanding the media characterization in political terms, the decision may more fairly be understood as the next step in a series of cases dating back to Brown v. Board of Education in 1954.  These cases largely involved the constitutionality, under the 14^th Amendment, of the racial preferences built into the admissions practices at Harvard and the University of North Carolina at Chapel Hill.

As a quick recap, the much-written-about Bakke case (challenging the practice of reserving slots in medical school for minority applicants) came down in 1978.  Because no one opinion was signed by a majority of Justices, the precise holding was unclear.  However, 25 years later in Grutter v. Bollinger, a case involving racial preferences for admission to the University of Michigan’s law school, the Court confirmed that racial quotas and racial preferences, or separate tracks and spots reserved for applicants of particular races, were unconstitutional.   Some universities nonetheless had processes to continue select preferences, and the preferences for some races necessarily disadvantaged applicants of other races.  A group of Asian applicants formed a group called Students for Fair Admissions and challenged the admission practices at Harvard and UNC, two colleges where race was an explicit factor to promote diversity.

In its decision on Students for Fair Admissions, the Court held that the admissions practices designed to promote diversity violated the 14^th Amendment guarantee of equal protection under the law, irrespective of race.  Previous Supreme Court decisions established exceptions in cases where a compelling state interest can be shown for racial distinctions, but those departures from equal treatment were specific to the distinction and narrowly drawn.

Because of the broad, general nature of the admissions criteria used by Harvard and UNC, their race-based preferences for admissions were not entitled to the exception.  The institutions claimed as their “compelling interests” justifying racial preferences the following:  (1) “training future leaders”; (2) preparing graduates to “adapt to an increasingly pluralistic society”; (3) “better educating its students through diversity”; (4) “producing new knowledge stemming from diverse outlooks”; (5) “promoting the robust exchange of ideas”; (6) “broadening and refining understanding”; (7) “fostering innovation and problem-solving”; (8) “preparing engaged and productive citizens and leaders”; and (9) “enhancing appreciation, respect, and empathy, cross-racial understanding, and breaking down stereotypes.”  While the Court likely would agree these were worthy goals, the court determined that these factors have no reasonable means of measurement and as such were insufficiently narrow and unspecific.  Therefore, the racial distinction could not be justified.

What does this decision mean for employers?  

Edward Blum, President of the Students for Fair Admissions, through another organization, American Alliance for Equal Rights, brought lawsuits in late August against two national law firms for racial discrimination against non-minority applicants by having dedicated fellowship programs for “students of color.”  In response to months of back and forth, both firms recently adjusted the language in their fellowship criteria, allowing for a larger applicant pool. Beyond Blum’s direct challenges, dozens of petitions have already been filed against other corporations (large and small) for discriminatory practices.

In short, this decision has already cast doubt on the lawfulness of hiring practices designed to implement affirmative action policies. It is and has long been unlawful to discriminate on the basis of race under Title VII of the Civil Rights Act of 1964 and, within North Carolina, under N.C.G.S. § 143-422.2, “The Equal Employment Practice Act.” However, if your company is a government contractor, for example, your hiring decisions may soon get even more complicated.

The validity of clauses in government contracts pertaining to affirmative action goals have been cast into doubt.  You may face increased exposure to lawsuits from minority applicants claiming unlawful discrimination in hiring and from non-minority applicants who claim they have been excluded under discredited affirmative action policies.  If you are a minority-owned business, do preferences or mandates in your favor and imposed by Federal contract provisions still have validity?

These are questions that were not addressed in Students for Fair Admissions, but they now loom as a result of the decision, which turned not on a federal statute or rule, but on constitutional grounds.  Its scope is far broader than college admissions.