State attorneys general from Tennessee, Kansas, and 11 other states put 100 of America’s largest corporations on notice that, following the Supreme Court decision against racial discrimination at Harvard and the University of North Carolina, private companies would be held to the same standard.
In a July 13 letter to CEOs of Fortune 100 companies, the AGs wrote that “the Supreme Court’s recent decision should place every employer and contractor on notice of the illegality of racial quotas and race-based preferences in employment and contracting practices.
“If your company previously resorted to racial preferences or naked quotas to offset its bigotry, that discriminatory path is now definitively closed,” the letter reads. “Your company must overcome its underlying bias and treat all employees, all applicants, and all contractors equally, without regard for race.”
The letter, authored by Kansas AG Kris Kobach and Tennessee AG Jonathan Skrmetti, was co-signed by AGs from Alabama, Arkansas, Indiana, Nebraska, Iowa, South Carolina, Kentucky, West Virginia, Mississippi, Missouri, and Montana.
They charged that the following companies, among others, had enacted racial hiring, promotion, or contracting quotas: Airbnb, Apple, Cisco, Facebook, Google, Intel, Lyft, Microsoft, Netflix, PayPal, Snapchat, TikTok, Uber, Goldman Sachs, and JPMorgan Chase. In all, they said, 27 banks, tech companies, and consulting firms set explicit racial hiring quotas, which courts have consistently ruled are illegal under U.S. law.
A Google sign at the company's office in San Francisco on April 12, 2023. (Jeff Chiu/AP Photo)
According to a Harvard Business Review 2022 survey, more than 60 percent of U.S. companies had a race or gender-based diversity, equity, and inclusion (DEI) program. Following the 2020 death of George Floyd, a black man, at the hands of police officers, numerous companies, including Wells Fargo, United Airlines, JPMorgan Chase, Delta Airlines, Ralph Lauren, and Estee Lauder, announced race-based hiring and promotion policies.
In July 2021, Facebook’s chief diversity officer Maxine Williams wrote that the company had exceeded its goal of increasing leadership roles held by “people of color” by 30 percent and would meet its goal of spending $1.1 billion on “diverse-owned businesses.”
Supreme Court Ends Race-Based Admissions
On June 29, the Supreme Court ruled that race-based admissions policies at Harvard University and the University of North Carolina violated the Equal Protection Clause of the U.S. Constitution’s Fourteenth Amendment.
In rendering this decision, the justices wrote: “Proposed by Congress and ratified by the States in the wake of the Civil War, the Fourteenth Amendment provides that no State shall ‘deny to any person . . . the equal protection of the laws’.
“Proponents of the Equal Protection Clause described its ‘foundation[al] principle’ as ‘not permit[ing] any distinctions of law based on race or color,”’ the justices wrote. “Any ‘law which operates upon one man [should] operate equally upon all’ … Eliminating racial discrimination means eliminating all of it.”
President Lyndon B. Johnson shakes the hand of Dr. Martin Luther King Jr. at the signing of the Civil Rights Act while officials look on in Washington on July 2, 1964. (Hulton Archive/Getty Images)
While this ruling concerned university admissions policies, the Supreme Court also argued that U.S. civil rights laws were applicable, which would apply to private companies as well. Title VI of the 1964 Civil Rights Act bars racial discrimination for any entity that receives federal funds; Title VII bars discrimination in employment and applies to private companies.
In addition, a number of states, including New York, California, and New Jersey, have laws that mirror the Civil Rights Act’s prohibition on racial discrimination in private employment. Some state laws allow for uncapped punitive damages to employees for racial discrimination, and a court in New Jersey awarded a white Starbucks employee $20 million in punitive damages in June, ruling that the company had fired her on racial grounds.
‘Gulf-Sized Race-Based Gaps Exist’
In the dissenting opinion to the Supreme Court ruling, Justice Ketanji Brown Jackson wrote: “Gulf-sized race-based gaps exist with respect to the health, wealth, and well-being of American citizens.
“They were created in the distant past, but have indisputably been passed down to the present day through the generations,” she stated. “Every moment these gaps persist is a moment in which this great country falls short of actualizing one of its foundational principles—the ‘self-evident’ truth that all of us are created equal.”
The states AG letter said that companies must “immediately cease any unlawful race-based quotas or preferences.
“Responsible corporations interested in supporting underprivileged individuals and communities can find many lawful outlets to do so,” they wrote. “But drawing crude lines based on skin color is not a lawful outlet.”
Erin Wilcox, an attorney at the Pacific Legal Foundation, said that while some companies may choose to eliminate race-based policies following the Supreme Court ruling, others will continue to use racial criteria or use “proxy” policies that do not explicitly state racial terms but find other criteria that achieve the same goal.
The Supreme Court decision may accelerate a trend that the current economic downturn had already started, which is reducing corporate diversity programs. According to a February report by Revelio Labs, in collaboration with the Washington Post and Reuters, diversity programs are being hit hard by corporate layoffs in the finance and tech sectors.
“Attrition rates for DEI roles have outpaced those of non-DEI roles at more than 600 US companies that laid off workers since late 2020, and have accelerated quickly in the last 6 months,” the report stated. “Further, over 300 DEI professionals have left from these companies in the last six months. Amazon, Twitter, and Nike have shed between 5 and 16 DEI professionals each, and Twitter’s infamous diversity team layoffs are not far behind.”
The Epoch Times reached out to Airbnb, Apple, Cisco, Facebook, Google, Intel, Lyft, Microsoft, Netflix, PayPal, Snapchat, TikTok, Uber, Goldman Sachs, and JPMorgan Chase for comment regarding this article but did not receive a reply.
Kevin Stocklin is a business reporter, film producer and former Wall Street banker. He wrote and produced "We All Fall Down: The American Mortgage Crisis," a 2008 documentary on the collapse of the mortgage finance system. His most recent documentary is "The Shadow State," an investigation of the ESG industry.
