‘Invidious discrimination’ | NASCAR and six other employers facing legal challenges from anti-DE&I groups after affirmative action ban

NASCAR and six other employers facing legal challenges from anti-DE&I groups after affirmative action ban

NASCAR and the George Floyd Memorial Scholarship are among the institutions to have faced legal challenges over diversity and inclusion policies since 2023’s affirmative action ban.

The US Supreme Court banned the use of affirmative action policies in college admissions in June 2023. Whilst the ban only applies to colleges, universities, and other academic institutions, it has prompted many organizations to review their DE&I policies, and others to face legal challenges from critics of diversity programs.

Seven organizations are named in a report from the Guardian that highlights companies or institutions forced into cutting specific programs from their DE&I policy following such legal battles.

NASCAR

NASCAR has been targeted by American First Legal (AFL), a far-right non-profit group over schemes that AFL claims violate the Civil Rights Act of 1964.

This includes NASCAR’s diversity driver development program, its diversity pit crew development program, and the NASCAR diversity internship program.

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The racing company predicted a lawsuit and adjusted requirements from the program which previously asked for “top minority and female” applicants to applicants of “diverse backgrounds and experience.”

Despite the changes, the AFL has filed a complaint, alleging that NASCAR’s commitment to affirmative race and sex-based hiring “has not wavered” and is “ongoing, deliberate, and illegal discrimination against white, male Americans.”

George Floyd Memorial scholarship

North Central University in Minneapolis, Minnesota has been accused of violating the Civil Rights Act for its George Flloyd Memorial Scholarship, which stipulates that applicants must “be a student who is Black or African American, that is, a person having origins in any of the black racial groups of Africa”.

The complaint from the Legal Insurrection Foundation is still pending and accuses the employer of “invidious discrimination.”

Morrison Foerster

California-based international law firm Morrison Foerster has altered the eligibility criteria for a fellowship program after a lawsuit from the American Alliance for Equal Rights (AAER).

The law firm now seeks students “with a demonstrated commitment to diversity and inclusion in the legal profession”.

Previously, only 1L students who were “members of historically underrepresented groups in the legal industry” were eligible for the fellowship.

Fearless Fund

Fearless Fund, the US’ first venture capital firm founded by women of color, has been hit by lawsuits forcing it to lose nearly all of its funding. The lawsuit argues that Fearless Fund’s business model inherently breaches the Civil Rights Act which prohibits racial bias in private contracts.

The fund has been banned from continuing its grant program and only two of the fund’s backers remain – the rest have withdrawn support.

Hello Alice

Hello Alice, a financial technology company providing access to credit, loans, grants, and business planning services to small business owners, entrepreneurs, and companies in the US, is facing legal action from AFL over one of its programs that offered $25,000 in grants to Black-owned businesses.

Hello Alice executives have responded, saying the case is “meritless” and “sets the nation, and small businesses, back.”

Wisconsin Bar

The State Bar of Wisconsin has been forced to review its summer hiring program, previously known as the “diversity clerkship program,” following the conclusion of a recent lawsuit.

The program originally required applicants to be members of minority groups, and even though the bar changed eligibility requirements to “students with “backgrounds that have been historically excluded from the legal field” following the affirmative action ban, a complaint was still filed.

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Following a partial settlement, the summer program will be open to applicants from all law students at local law schools.

National Museum of the American Latino

The National Museum of the American Latino has changed the criteria for its internship program after an AAER complaint against the museum’s director was settled in March. No longer open solely to Latino applicants, the internship is now “equally open to students of all races and ethnicities, without preference or restriction based on race or ethnicity.”

What DE&I legal battles could mean for HR

Whilst several of the legal challenges above are still pending, and the affirmative action ban does not apply to legal employers, it is clear that DE&I continues to be a highly politicized issue in the US.

HR and DE&I teams may need to review and reimagine their programs and policies, if not least to prepare for a possible lawsuit.



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