What the Supreme Court’s Affirmative Action Ruling Means for Employers

On June 29, 2023, a divided U.S. Supreme Court ruled that affirmative action in student admissions decisions at Harvard University and the University of North Carolina at Chapel Hill violated the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. What does the Court’s holding mean for employers?

Well, at this time, it means very little. The legal issues around affirmative action in college admissions is quite different from the legal framework for affirmative action in the workplace. While it is possible, even likely, that challenges to workplace affirmative action or diversity initiatives will come in the future, for now, the Supreme Court’s decision provides an opportunity to remind employers of the current complicated rules around affirmative action and diversity initiatives in employment. These include issues associated with recruiting, hiring, retention and advancement.

Let’s review affirmative action in college admissions (and the Court’s decision today finding it unconstitutional) compared with how affirmative action is analyzed in the employment context under Title VII of the Civil Rights Act.

Background of the Cases. In 1978, the Supreme Court issued a decision that permitted some use of race in college admissions, finding that the creation of a racially diverse educational environment was a compelling state interest. It reaffirmed this holding in 2003, but with the caveat by Justice O’Connor that race-conscious admissions policies should be “a temporary measure” since they constitute a “deviation from the norm of equal treatment of all racial and ethnic groups.” This caveat is critical to the two cases before the Supreme Court now.

In the first, Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, a group of students alleged that Harvard, a private university, discriminates against Asian-American applicants in its undergraduate admissions process by holding them to a higher standard. The federal district court found that Harvard did not engage in unlawful discrimination and its ruling was upheld on appeal to the U.S. Court of Appeals for the First Circuit.  

In the second case, Students for Fair Admissions, Inc. v. University of North Carolina, a group of students claimed that UNC, a State university, unlawfully discriminates against White and Asian-American applicants by using race as a plus factor that is given too much weight in the admissions process. The federal district court upheld UNC’s admissions process. The case was appealed, but before the U.S. Court of Appeals for the Fourth Circuit could rule, it was consolidated with (and then subsequently split from) the Harvard case.

In both cases, the issue before the Supreme Court was whether it should overrule its prior cases to find that colleges and universities may not use race as a factor in admissions.

The Supreme Court’s Ruling. A divided Supreme Court held that under the strict scrutiny applicable to decisions based on race, the universities failed to satisfy the fundamental constitutional requirements. The criteria used must be based on sufficiently measurable goals, race must never be used as a “negative” or amount to racial stereotyping, and the favorable treatment of groups over others must have some logical end point.

The universities’ goals – involving things such as preparing future leaders, preparing graduates to adapt to an increasingly pluralistic society, promoting the robust exchange of diverse viewpoints, and enhancing respect, empathy, and cross racial understanding, among other – were laudable, but incapable of measurement.

The universities also could not explain cogently how the means they use (percentage representation of the various groups) work to achieve the goals that they pursue, as required by strict scrutiny. With respect to the goals of minority representation, UNC said its choice was motivated by working to avoid underrepresentation of various minority groups, while Harvard works to guard against “inadvertent drop-offs in representation” of minority groups from year to year.

Yet, the racial classifications on which admissions are measured (the standard EEO categories) are, said the Court majority, themselves imprecise. The classifications of “Asian” and “Hispanic” include many groups who are distinct from one another, yet they are treated as the same under the universities’ criteria. Thus, the connection between the racial goals and means could not genuinely be explained. And, the classifications as used by the universities suffered from the infirmity of racial stereotyping.

Finally, the universities could not forecast an endpoint for affirmative action in admissions other than by way of aspirational statements and platitudes.

The majority decision of the Court concluded with the following observation: “the student must be treated based on his or her experiences as an individual—not on the basis of race. Many universities have for too long done just the opposite. And in doing so, they have concluded, wrongly, that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned but the color of their skin. Our constitutional history does not tolerate that choice.”

Title VII’s Prohibition on Discrimination. As the Supreme Court has previously asserted, Title VII prohibits employers from exhibiting a “discriminatory preference for any group, minority or majority.” This means that all individuals are protected from discrimination based on any legally protected personal characteristic. Under the law, employers should be making decisions based on an employee’s job-related qualifications.

Required Affirmative Action in Employment. Some companies are required to implement affirmative action programs that specifically target certain legally protected personal characteristics. These include government contractors and subcontractors, who are required to engage in affirmative action as to women, minorities, individuals with disabilities, and certain protected veterans. It also includes companies that have been ordered by a court to remedy the effects of past discrimination. But even these entities must be careful in how they engage in affirmative action initiatives. For example, the DOL has engaged in enforcement actions against contractors who fail to include whites and males in their required affirmative action programs.

Voluntary Affirmative Action in Employment. For other private employers, the Supreme Court has permitted the use of a voluntary affirmative action plan, but the circumstances under which such plans may be used are quite limited: (1) the plan must be designed to eliminate a conspicuous racial imbalance in traditionally segregated job categories; (2) the plan may not trammel the interests of the non-minority employees; and (3) the plan is temporary in nature, intended to eliminate a manifest imbalance and not to maintain balance. The EEOC reiterates these principles in its Compliance Manual as well.

Diversity, Equity, and Inclusion in Employment. Over the past several years, there has been heightened attention on increasing diversity in the workplace – whether through a formal plan or informally. Many companies are looking at hiring, retention, and advancement. They may be setting percentages for hiring employees of color, or more specifically Black employees, or female employees – perhaps generally or perhaps for certain levels or categories of positions. In this context, it is important to distinguish between quotas and goals.

Quotas are rigid requirements. They are only rarely permitted, such as when they have been ordered by a court or negotiated as a remedy in a consent decree or settlement agreement. A voluntary adoption of a quota will almost never be legal.

Goals, on the other hand, are aspirational and may be legal. But it is important to carefully review the language used for the goal – definitive language like “commitment” or “guarantee” can convert a goal into a quota. We further suggest not limiting the goals to specific protected personal characteristics like race or sex, which could give rise to reverse discrimination claims. Rather, it may be advisable to tie the goals more generally to broader societal diversity – including economic, educational, and geographic factors.

It is also important to be very thoughtful about setting the goals themselves. We recommend that employers look at the individual job or job group in question. It is important to understand the number and kind of opportunities expected to be available for that particular job, as well as the availability of qualified (or qualifiable) applicants for the position, based upon the reasonable recruitment area. Then employers should identify whether there are barriers to hiring and advancement for certain groups. These barriers may vary depending on the job and the circumstances. Employers should identify solutions to any barriers, which could include increasing the recruitment area, using new recruitment sources, and engaging in additional outreach activities. Following this process will allow employers to set realistic and thoughtful goals.

Ultimately, an employer must still make decisions based on an employee’s job-related qualifications – and ensure that managers understand this requirement. The purpose of these diversity efforts is to increase the pool of qualified applicants to include a greater number of diverse individuals and to provide resources to allow those individuals to succeed – which should increase diversity in the workplace.