Corporate DEI initiatives face new challenges in the aftermath of affirmative action strike down

How retailers can get ahead of backlash and mitigate risks
Coordinator, Digital Communications & Marketing

Last month, NRF’s Diversity, Equity & Inclusion Working Group welcomed attorneys Kevin White and James La Rocca from Hunton Andrews Kurth to speak on legal challenges to corporate DEI programs and strategies for protecting retailers’ DEI initiatives.

DE&I Working Group

Learn more about NRF’s DE&I Working Group and how it aims to enhance diversity in the retail corporate workplace. 

Since the Supreme Court’s recent ruling that race can no longer be considered as a factor in university admissions, corporate DEI programs have been challenged. White and La Rocca dove into the ruling’s implications on corporate DEI programs and also spoke about religious accommodation cases.

Risks threatening corporate DEI initiatives

La Rocca offered several examples of cases and lawsuits that challenged DEI initiatives of law firms and corporate funding of programs. Many argued a violation of Section 1981, including a lawsuit filed against venture capital firm Fearless Fund in August. The fund was established to support Black female small business owners; the suit alleges the fund’s grants are a violation because the program’s application process forms a contract that is based on race.

The newfound risks driven by the Supreme Court ruling in Fair Admissions Inc. v. President and Fellows of Harvard College do not mean DEI initiatives must stop. Rather, organizations must understand and address the spectrum of risks associated with their DEI programs, including their risk tolerance.

White and La Rocca consider programs that pose the highest risk to be those that base employment decisions on an individual’s protected status, such as gender, sex, race or disability. That could mean reassessing and reworking the language and criteria of an organization’s DEI program to not include or exclude solely on protected categories.

Other elements to consider include encouraging diversity in business partners or broadening the organization’s definition of diversity to encapsulate a variety of characteristics like experience, economic background or world view.

A rise in religious discrimination

White and La Rocca said that EEOC charges with religious discrimination allegations increased six-fold in fiscal year 2022 versus fiscal year 2021, equating to roughly 13,814 charges. The increase was largely driven by vaccine mandates in the workplace.

That is less alarming, however, than the new change in law imposed by Groff v. DeJoy under Title VII of the Civil Rights Act of 1964. In light of this change, White recommends that retailers re-examine how their organizations handle religious accommodation requests.

The meat of the change is held in the undue hardship standard. “Title VII requires an employer that denies a religious accommodation to show the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business,” White said.

To account for these changes, White recommended organizations institute a formal accommodations process similar to that of the Americans with Disabilities Act and offer a reasonable accommodation if unable to provide the employee’s preferred accommodation.

NRF’s Diversity, Equity & Inclusion Working Group is open to NRF member retail company executives who are responsible for incorporating diversity and inclusion into their company culture. Meetings give members an opportunity to exchange ideas and best practices on issues that seek to enhance diversity in the retail corporate workplace.

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