DE&I   //   June 29, 2023

Supreme Court’s affirmative action ruling — what it means for employers

On Thursday the U.S. Supreme Court ruled that colleges and universities must stop considering race in admissions, putting an end to affirmative action in higher education. 

The court’s conservative majority overturned precedents reaching back 45 years by ruling against admissions plans at Harvard and the University of North Carolina, the nation’s oldest private and public colleges. 

The decision will have many ripple effects, especially for businesses. Making hiring decisions based on race is already illegal in the U.S., so the decision won’t change anything on that front, but it will have other implications. Employers have long been caught in the crosshairs of decisions like these, leaving them to navigate how government decisions will impact business, when to speak up about issues and, in this case especially, what effect it will have on diversity, equity and inclusion strategies.

At the same time, Kara Govro, Mineral’s chief HR legal expert, doesn’t want employers to panic, either. “I don’t think employers need to panic that there’s going to be a massive wave of litigation just because affirmative action has been shot down at colleges,” said Govro. “On the whole, attorneys aren’t going to take these cases.”

Here’s what you need to know about the impact the Supreme Court decision has on employers.

1. Employers could lose pipeline of highly qualified future workers and business leaders

Almost 70 employers, including General Electric, Google and JetBlue Airways, warned in a brief to the court that without affirmative action they’ll lose access to “a pipeline of highly qualified future workers and business leaders” and will struggle to meet diversity hiring goals.

Without affirmative action, colleges can no longer consider race in their admissions decisions. That might mean that we see fewer people of color in higher education and graduating with degrees, heading into the workplace. 

Employers have already begun moving to degree-free hiring, but the Supreme Court’s decision will underline that as an important strategy for those wanting to maintain their workforce diversity. Giants like Delta, Google and IBM have already moved in this direction. Last week, Kellogg’s UK joined the fray, stating that employees no longer need a degree to apply for a job at the company, citing efforts to widen its talent pool and promote inclusion.

Melanie Naranjo, vp of people at compliance training company Ethena, said that skills-based hiring will become even more important now that affirmative action has been gutted. 

2. More pressure on DE&I goals

“The idea behind affirmative action is to level the playing field so that everyone has opportunities and equal access to higher education and then that feeds into the employment sector,” said Naranjo. “When you start to remove this affirmative action, now the playing field is even less level than it was before. Employers now have to compensate for that lack in order to then continue to prioritize diversity, equity and inclusion.”

“When you start to remove this affirmative action, now the playing field is even less level than it was before. Employers now have to compensate for that lack in order to then continue to prioritize diversity, equity and inclusion.”
Melanie Naranjo, vp of people at compliance training company Ethena.

She said employers will have to learn, more than ever before, the systemic biases that are at play.

“Employers have been able to rely somewhat on other efforts,” said Naranjo. “Now they’re going to have to look at the whole picture and really understand what is holding people back so that they can try and help mitigate that.”

3. Future of ERGs put in question

Naranjo said she worries the ruling could spell the end of employee resource groups (ERGs). Companies have put their DE&I strategies in high gear since the summer of 2020 after the Black Lives Matter movement prompted by the murder of George Floyd. The social justice movement gave rise to ERGs that are centered around discriminatory areas like race or sexuality so that workers can share their experiences. 

“We don’t know what could be on the chopping block next,” said Naranjo. “ERGs could be seen as discriminatory if people say ‘this is for one specific group and it shouldn’t be because it’s for everyone.’”

She said the Supreme Court decision will be a blow to a range of DE&I strategies, with ERGs as just one example. While it’s illegal in the U.S. to make hiring decisions based on race, some employers require that for any open role, at least one person of color and/or woman candidate must be interviewed before a hiring decision can be made. Naranjo said she worries that might also be compromised as a result of the ruling. 

“If things like this start to get shut down, we are going to have to be prepared to rethink and restructure how we approach inclusivity,” said Naranjo. “Rather than having a race-based ERG, we would then call it an inclusivity group, and it would have the exact same goals.”

Govro said she is even more concerned around affirmative action for federal contractors. “They are encouraged to match the actual population to their talent pool,” said Govro. “They’re not supposed to use race in the end, but they’re supposed to make efforts to have their body of employees look like the population. That includes acknowledging population numbers. If you’re in a 10% Asian community, is your talent pool 10% Asian?”

“I could see affirmative action for federal contractors coming down. It will be easier to go after than private employment.”
Kara Govro, Mineral's chief HR legal expert.

“This is probably what’s next on the chopping block,” she continued. “I could see that coming down. It will be easier to go after than private employment.”

4. To speak out or not

Employers need to think about the messaging that they send to their employees following this decision. 

“It’s important that every company is thoughtful in their communication to their employees, but I do think they should be proactive,” said Naranjo. “Silence is very loud and your employees really hear that. It’s better to say something rather than nothing.”

That could look like anything from dropping a note in a DE&I Slack channel saying, “We’re aware of this, please reach out if you need,” to asking managers to make room in their one-on-ones if they see fit and without any pressure. From there, companies can also monitor if people are suffering at work and are unable to focus after the decision. “Be thoughtful, proactive and have an open door policy,” said Naranjo.

Almost exactly a year ago, the Supreme Court made another landmark decision. Roe v. Wade was overturned, ending the federal constitutional right to abortion in the U.S. During that decision, employers had to consider quickly if they were going to make a statement, either internally or externally, or not.

Just how much an employer should get involved is a question that comes up time and again in politics. While some firmly believe a company’s corporate social responsibility dictates it mustn’t stand silent, others argue it’s better that the employer stays well out of political matters, particularly polarizing ones.  

For Naranjo, employers must look to the needs of their employees. “Many employees are going to be impacted by this, whether it’s from a mental health perspective or their children applying to colleges or just the general state of the United States and how they feel about these decisions,” said Naranjo.