This past term, the United States Supreme Court decided two important cases that could have broad implications for employers. One related to affirmative action and DEI efforts, and the other related to religious accommodations.
Affirmative Action and DEI Efforts
In a landmark Supreme Court decision, Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (together with Students for Fair Admissions, Inc. v. University of North Carolina, et al.), the Supreme Court determined that Harvard and the University of North Carolina (“UNC”) violated the 14th Amendment’s Equal Protection Clause by unlawfully considering race in undergraduate admissions decisions. This was a hotly contested decision with the majority opinion by Chief Justice John Roberts, three concurring opinions, and two dissenting opinions.
The decisions related to Harvard’s practice of permitting race/ethnicity to be considered as part of an applicant’s personal rating in the application process. Similarly, UNC considered race/ethnicity as a “plus” factor in the admissions process.
In evaluating the application that included race as a factor in the decision, the Court noted the “‘core purpose’ of the Equal Protection Clause: ‘do[ing] away with all governmentally imposed discrimination based on race.’” The Supreme Court opined that the equal protection clause applies “without regard to any differences of race, of color, or of nationality” and it is “universal in its application.” Thus, “any exception to the Constitution’s demand for equal protection must survive a daunting two-step examination known as ‘strict scrutiny.’” In other words, it must be demonstrated that the racial classification is used to “further compelling governmental interests” and the government’s use of race must be “narrowly tailored” or “necessary” to achieve that interest. As such, race-based admissions are “permitted only within the confines of narrow restrictions,” and university programs must comply with strict scrutiny and “may never use race as a stereotype or negative, and—at some point—they must end.”
In evaluating the admission systems at Harvard and UNC, the Supreme Court stated that “however well-intentioned and implemented in good faith,” these systems fail each of these criteria and are thus invalid under the Equal Protection Clause of the Fourteenth Amendment. The Supreme Court noted that the programs “lack sufficiently focused and measurable objectives warranting the use of race, unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful end points.” Further, “ameliorating societal discrimination does not constitute a compelling interest that justifies race-based state action.” The Supreme Court further stated that a “student must be treated based on his or her experiences as an individual—not on the basis of race.” The Supreme Court opined that, for too long, many universities had done just the opposite and, in doing so, “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.”
However, a school may still consider an applicant’s discussion of race. The Court stated that nothing in the opinion should be construed as “prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.”
Takeaways
The effects of this decision may be far reaching. In fact, following this decision the Education Department opened up a civil rights investigation into Harvard’s admissions process on the grounds that showing preference to applicants whose relatives are wealthy donors to Harvard, or whose parents are Harvard alumni, resulted in a disparate impact on Black, Hispanic, Asian, and other non-White undergraduate applicants because nearly 70% of donor-related applicants were White, and nearly 70% of legacy applicants were also White. The investigation came after a lawsuit filed by Lawyers for Civil Rights on behalf of three minority advocacy groups alleged that those students who receive preferential treatment were “overwhelmingly White” and made up nearly 15% of Harvard’s admitted students.
Also, although the decision does not specifically implicate employers, the Equal Employment Opportunity Commission (EEOC) has weighed in, stating that the Supreme Court decision does “not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”
However, even though this decision did not address employer diversity efforts under the lens of Title VII, the Supreme Court decision may lead to challenges against employers that implement DEI efforts if the efforts favor one race over another. If employer programs result in discrimination (even if unintended), employers risk a claim of discrimination.
For example, the American Alliance for Equal Rights recently sued Perkins Coie LLP and Morrison & Foerster LLP in separate lawsuits alleging that law firm fellowship programs dedicated to minorities amount to unlawful racial discrimination. Morrison Forster’s Fellowship For Excellence Diversity And Inclusion was targeted on the grounds that it stated that applicants do not qualify unless they were African American/Black, Latinx, Native American/Native Alaskan, or members of the LGBTQ+ community. Similarly, Perkins Coie’s diversity fellowship program stated that applicants did not qualify unless they were students of color who identified as LGBTQ+ or students with disabilities.
The American Bar Association (ABA) condemned the attacks and said that diversity, equity, and inclusion programs help remove the barriers for recruitment and retention of legal talent from underrepresented groups and that efforts to open up opportunities to underrepresented groups would be significantly damaged by the loss of diversity and pipeline programs. One of the ABA’s four goals is to eliminate bias and enhance diversity, and the organization is committed to promoting full and equal participation in the ABA, the legal profession, and the justice system. The ABA called on law firms, law schools, and employers to rededicate themselves to create a more diverse and inclusive environment.
Subsequently, Morrison Forrester responded and changed the eligibility criteria for the DEI fellowship to no longer reference historical underrepresentation. Now, the program seeks to recognize students with a demonstrated commitment to diversity and inclusion in the legal profession, instead of calling for members of historically underrepresented groups in the legal industry.
Along the same lines, the US District Court for the Eastern District of Tennessee recently ruled that the Small Business Administration (SBA) cannot automatically assume a small business is socially and economically disadvantaged based on the owner’s race when applying for the SBA’s 8(a) business development program. Prior to the ruling, small businesses were automatically considered to be socially disadvantaged and eligible for the 8(a) program if the owner identified as a racial or ethnic minority The ruling essentially means that individuals applying for the program will need to show by a preponderance of the evidence that they are deemed socially disadvantaged and they will not automatically be deemed so just because they are a racial or ethnic minority.
Given the current landscape, it is advisable for employers who seek to recruit, hire, and employ individuals from diverse backgrounds to do so in a manner that is fair and affords all individuals equal opportunity in the workplace based on merit, skills, and qualifications. Employers should carry on with diversity efforts in a legally compliant manner.
Religious Accommodation
In Groff v. DeJoy, the United States Supreme Court recently reviewed what the proper standard should be when an employer denies an employee’s request for a religious accommodation under Title VII. In this case, Groff challenged the United States Postal Service’s (USPS) denial of his request for a religious accommodation in the form of an exemption from Sunday shifts. The trial court and the Third Circuit ruled in USPS’s favor. Relying on TWA v. Hardison, 432 U.S. 63 (1977), the lower court determined that USPS had established that providing Groff with an exemption from Sunday shifts amounted to an undue hardship because it “imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.” Thus, the lower courts held that USPS met the burden of establishing that the requested accommodation would impose more than a “de minimis cost” on the employer.
On appeal, however, the Supreme Court considered whether it should confirm the “de minimis test” for undue hardship under Title VII as stated in Hardison or utilize a new test. The Court also evaluated whether an employer can demonstrate “undue hardship” under Title VII by merely showing that the requested accommodation burdened the employee’s coworkers rather than the business itself.
In a unanimous opinion, the Supreme Court created a new standard by which to review requests for religious accommodation. Specifically, the Court held that an “undue hardship” is demonstrated when a burden is substantial in the overall context of an employer’s business, noting that this is a fact-specific inquiry. The Court stated that a “hardship” is, at a minimum, “something hard to bear.” A hardship is more severe than a “mere burden.” Thus, an employer cannot escape Title VII liability simply by showing that an accommodation would impose some sort of additional costs. The modifier “undue” means that the requisite burden, privation, or adversity must rise to an “excessive” or “unjustifiable” level. Interpreting “undue hardship” in this way is “something very different from a burden that is merely more than ‘de minimis’” (i.e., something that is very small or trifling, as defined in Black’s Law Dictionary) and closer to the references in TWA v. Hardison to “substantial additional costs” or “substantial expenditures.”
Hence, the Supreme Court stated that an employer must show that the burden of “granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business.” In doing so, “courts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, ‘size and operating cost of [an] employer.’” Ultimately, “‘undue hardship’ in Title VII means what it says, and courts should resolve whether a hardship would be substantial in the context of an employer’s business in the commonsense manner that it would use in applying any such test.”
With respect to whether an impact on coworkers could amount to an undue hardship, the Supreme Court specifically stated that a coworker’s dislike of a religious practice or expression in the workplace or that an accommodation may be provided does not “factor into the undue hardship inquiry.” Because Title VII requires an assessment of a possible accommodation’s effect on the conduct of the employer’s business, the impact of a particular accommodation on coworkers is only relevant to the extent that the impact on coworkers affects the conduct of the business.
The Court also stated that “Title VII requires that an employer reasonably accommodate an employee’s practice of religion, not merely that it assess the reasonableness of a particular possible accommodation or accommodations.” Consequently, an employer cannot merely state that a particular accommodation poses an undue hardship and deny it; the employer must consider other options (such as voluntary shift-swapping) that might resolve the conflict between the employee’s religious practice and the work requirement.
As a result, the Supreme Court vacated the judgment in favor of the USPS and remanded to the lower court to apply the “clarified context-specific standard” assuming that the Third Circuit’s application of the Hardison’s “‘more than a de minimis cost’ test may have led the court to dismiss a number of possible accommodations, including those involving the cost of incentive pay, or the administrative costs of cooperation with other nearby stations with a broader set of employees.”
Takeaways
In light of this decision, employers should be careful with how they approach requests for religious accommodation. Before rejecting the request as an undue hardship, an employer must be able to demonstrate that the costs to its business of a religious accommodation request would be excessive or unjustifiable under the circumstances. An employer cannot deny a religious accommodation request under the guise of undue hardship unless the employer faces “substantial increased costs in relation to the conduct of its particular business.” An employer may only rely on the defense that a requested accommodation creates an undue burden for coworkers if it can demonstrate that accommodating the request would not only impact other employees but substantially affect the conduct of the business itself.
Join KSB Law for a Lunch and Learn on October 17, 2023, Impact on DEI in the Wake of the SCOTUS Affirmative Action Ruling where we will discuss the impact on employment settings, including employers that maintain Diversity, Equity, and Inclusion (DEI) initiatives.
This summary is for informational purposes only and is not intended to constitute legal advice. This information should not be reused without permission.
