The recent 11th Circuit decision in American Alliance for Equal Rights v. Fearless Fund offers crucial insights for organizations implementing Diversity, Equity, and Inclusion (DEI) initiatives. The court ruled that the Fearless Strivers Grant Contest, limited to Black women, likely violated 42 U.S.C. § 1981, which prohibits racial discrimination in contracts. As an attorney experienced in corporate governance and compliance, here are some key lessons:
Balance DEI Goals with Legal Requirements:
While DEI initiatives are deemed essential for fostering diversity and addressing historical inequities, they must be designed to avoid creating absolute barriers based on race or other protected characteristics. Instead, programs can focus on broader eligibility criteria that align with legal standards while promoting inclusivity.
For example, DEI grant programs can be structured in a way as to not create a contract with grant recipients when targeting a specific racial group. Alternatively, if the grant creates a contractual relationship based on its terms and conditions for participation, the grant may be marketed towards a certain racial group; however, the grant may not exclude participation of anyone based on race.
First Amendment Considerations:
The court distinguished between advocacy for racial equality and the act of racial discrimination itself, which is not protected by the First Amendment. In the Fearless Fund case, the court found that the Fund's contest constituted a contractual relationship and was thus subject to 42 U.S.C. § 1981, which prohibits racial discrimination in contracts. The court ruled that the contest's exclusionary criteria were not protected expressive conduct but rather discriminatory practices.
Organizations must be careful not to conflate advocacy and racially discriminatory conduct in their DEI efforts. While promoting diversity is laudable, the methods employed must not infringe upon the rights of others based on their race.
Conclusion:
As we plan ahead, we must elevate the fight for diversity, equity and inclusion with more innovative strategies that can hold up under legal scrutiny, especially 42 U.S.C. § 1981. Supporters of diversity, equity and inclusion principles will adjust and continue the fight to create a society that encourages and supports diversity, equity and inclusion efforts at all levels.
For all of those who are feeling disappointed and defeated, be encouraged as the fight is not over. Fearless Fund and those who share its mission will regroup and come back stronger than ever in the fight for diversity, equity and inclusion. Fearless Fund, we stand with you and encourage you to remain fearless in the fight to economically empower Black women founders as you have and undoubtedly will continue. Arian and her team at Fearless Fund may lose some battles along the way, but I guarantee you that they will not lose the war.
#DEI #business #FearlessFund #ariansimone
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