Diversity and Inclusion

The Upcoming US Supreme Court Ruling on Affirmative Action: What Companies Need to Know

At many companies in the US, diversity, equity, and inclusion (DEI) programs have become a part of the fabric of the organization—a critical way to address societal inequities, while also building a strong workforce able to meet the challenges of today’s complicated, fast-changing world.

But those initiatives could be dealt a blow as a result of an expected decision from the US Supreme Court. By the end of June, it will rule on the constitutionality of race-based affirmative action in university and college admissions. If the decision overturns or fundamentally changes these policies in higher education, DEI in businesses could also be impacted.

For that reason, companies need to start preparing now for how best to respond.


What is Race-Based Affirmative Action?

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These policies were created during the civil rights era to boost the representation of underrepresented groups, particularly African Americans, at work and in higher education. In academia, the aim is to help students who otherwise would lack adequate access to high-quality educational institutions. An additional goal is to boost student body diversity because exposure to diverse perspectives benefits the entire student body, according to Voice of America.

Most schools take into account multiple factors, from extracurricular interests to grades, when assessing applicants, with race being just one of them, according to Bloomberg. The current system has led to vastly larger numbers of admitted students and graduates from marginalized groups. Bloomberg cites a McKinsey & Co. study of 840 four-year institutions from 2013 to 2020, which found that close to two-thirds increased the number of minorities and more than half boosted graduation rates.


Previous Court Challenges

There have been multiple challenges to affirmative action in higher education, according to the law firm Valerian Law. Reuters notes that in 1978, the Court upheld such policies, finding that they were acceptable as long as they served specifically to engender diversity, eschewed racial quotas, and remained one among many considerations used in admissions decisions.  Twenty-five years later, the Court ruled against the University of Michigan’s practice of giving points to minority applicants but greenlighted the use of race as one of multiple factors in admissions. In 2016, the Court again upheld that decision in two cases brought against the University of Texas.

As for state rulings, nine states—California, Washington, Florida, Michigan, Nebraska, Arizona, New Hampshire, Oklahoma, and Idaho—have banned race-based affirmative action, according to Voice of America.

  What Cases Are Being Heard? 

In October 2022, the Supreme Court heard oral arguments in two cases in which the plaintiffs contended that affirmative action policies discriminate against certain applicants, says Reuters. Both were brought by Edward Blum, a long-time opponent of affirmative action. One claimed that Harvard University’s admissions policy is biased against Asian American applicants. Another argued that the University of North Carolina discriminates against both Asian Americans and White people.  In response, notes Reuters, the schools contended that race is rarely used as the key factor in decisions and that ending affirmative action would decrease the number of students from marginalized communities.

The Court’s reaction didn’t bode well for the future of race-based affirmative action, however. During arguments, its conservative majority signaled significant skepticism about the validity of such policies, according to Reuters.


The Impact on Higher Education

The ruling, which will be announced by the end of June, could end or, at the least, dramatically transform affirmative action at colleges and universities. Because the cases involve both a public and private institution, the effect would likely be particularly profound, impacting the entire world of higher education, points out Inside Higher Ed. Already, 2013 research found a 23% decline in the likelihood that people of color are admitted to public schools located in states that have prohibited affirmative action, according to Voice of America. “In places where they have banned affirmative action … we’ve seen drops with the racial representation relative to the high school population, when the school stopped engaging in affirmative action,” Katharine Meyer, a fellow at the Brookings Institution, recently told Voice of America.

At the same time, the impact could be especially profound at the more selective schools that, as Reuters states, typically take race into account more often than less-selective institutions, which turn down fewer applicants.


 Could Companies Be Next?

A ruling against race-based affirmative action could be felt far from academia. It also could negatively affect companies’ diversity efforts—and hamper corporate programs that encourage diversity in race, gender, and other characteristics, in addition to race, points out Quartz.

Technically, the education cases will affect public institutions under the 14th Amendment’s section forbidding states from denying anyone “equal protection under the law,” and private schools under Title VI of the Civil Rights Act, which outlaws discrimination in programs receiving federal funding, as Quartz says. Workplace discrimination, on the other hand, is governed by Title VII, a different part of the Civil Rights Act, that guarantees “equal employment opportunity.”

But “[i]t would be a logical conclusion for the courts to treat the language of Title VII as having a similar effect in the workplace,” wrote Noah Feldman, a professor at Harvard Law School, in The Washington Post.


The Impact on Hiring

Corporate talent pipelines will be one area likely impacted. That’s especially true for competitive companies, which recruit from selective institutions that are most likely to have race-conscious admissions, says Bloomberg. If colleges are not able to educate a diverse population of students, there will not be a pipeline of well-trained diverse candidates for companies to hire.

In addition, companies might be prohibited from considering race or other classifications in making hiring and promotion decisions. For example, an anti-affirmative action ruling could affect anything from an initiative to employ more women engineers to taking into account an individual’s gender to fill an open slot on a largely White, male leadership team, points out Quartz.

That’s why, last year, 82 corporations and businesses, including Procter & Gamble, Uber, and Accenture, signed and submitted amicus briefs in the Supreme Court in support of affirmative action, stating that a diverse educational environment benefits the economy and helps to build both leaders and workforces, notes the Legal Defense Fund. “University students who study and interact with diverse peers, and particularly with racially and ethnically diverse peers, exhibit enhanced cognitive development necessary for a wide range of skills highly valued in today’s economy,” stated one of three briefs submitted, according to the Legal Defense Fund.


What Companies Can Do

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For companies committed to DEI, a court ruling outlawing race-based affirmative action would create many questions. At the very least, organizations will need to review their DEI programs for efforts that could be construed as unlawful, observes Lexology. To avoid the possibility of discrimination lawsuits, some companies may choose to take a less direct approach to building diverse workforces. That means dialing back on programs that explicitly seek to encourage the hiring of women or other underrepresented groups.

One potential approach is what Alphonso David, president and CEO of the Global Black Economic Forum, writing in US News, called “affirmative intervention.” That means identifying promising young people and enrolling them in sponsorship/support/mentoring programs starting in school and lasting throughout their professional life.

Other DEI experts advise companies—and employees—not to give up. Most students of color who attend colleges or universities enroll in schools that don’t have affirmative action policies, indicates Fortune.  Companies need to recruit from a broader range of colleges and universities, not just the Ivy League, for example.

What’s more, there’s also the matter of developments outside the scope of any court decision—the double forces of inevitable demographic change and younger leaders who take for granted that DEI is important, says Fortune. Ultimately, these inexorable transformations could dull the impact of a court ruling against race-based affirmative action.


Erin Souza-Rezendes serves as Vice President, Global Communications for Catalyst, where she elevates the organization’s thought leadership on women in the workplace through strategic communications and media relations. For more than 15 years, Erin has been dedicated to helping mission-driven leaders and organizations tell their stories, expand their audiences, and…

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