What Employers With Affirmative Action Policies Need to Know About a Recent Supreme Court Decision

05 July 2016 Labor & Employment Law Perspectives Blog

Many employers who have read about the U.S. Supreme Court’s recent affirmative action decision are wondering what impact, if any, the ruling will have on them. After all, the main issue in that case was the propriety of a university’s affirmative action plan — specifically, its consideration of prospective students’ races in its admissions process. That issue could have significant implications for employers, considering that many companies, including government contractors and subcontractors with 50 or more employees, are required to develop and use an affirmative action plan in their normal hiring practices.

Despite the opportunity to make far-reaching precedent, the Supreme Court’s decision looked narrowly at only the following issue: “whether the race-conscious admissions program at the University of Texas is lawful” under the Constitution. In her appeal to the Supreme Court, the petitioning jilted student argued that:

  1. The university had not specifically stated what its “compelling interest” was in the race-conscious plan it applied to its admissions process
  2. The university had no reason to consider race as part of its admissions criteria because it already admitted the top 10 percent of graduates from Texas high schools, and met its affirmative action goals through that approach
  3. It was not necessary for the university to consider race in admissions because that policy only had a small impact on creating a more diverse student body
  4. There were numerous other race-neutral ways available that the university could have used to achieve the diverse student body it desired

In its 4–3 ruling authored by Justice Anthony Kennedy, the court found each of these arguments unpersuasive and upheld the legality of the admissions policy, including the race-conscious component of it. However, the court emphasized that its “affirmance of the University’s admissions policy today does not necessarily mean the University may rely on that same policy without refinement,” and that it was “the University’s ongoing obligation to engage in constant deliberation and continued reflection regarding its admissions policies.” The court urged the university to use the data gathered through the use of its admissions policy to scrutinize the fairness of that policy, and to continue to assess whether changing demographics have undermined the need for a race-conscious admissions policy.

The good news for employers is that the Supreme Court’s holding in the case appears limited to admissions policies and higher education generally, and the specific characteristics of the University of Texas’s admissions policy in particular. So what, if any, implications does the decision have for affirmative action policies outside this narrow context? Federal contractors and subcontractors required to develop Affirmative Action Plans pursuant to Executive Order 11246 should be mindful of the Supreme Court’s admonition to remain constantly aware of the fairness of any race-conscious policy, and of whether that policy continues to contribute positively to the overall goal of achieving diversity.

While the Supreme Court does not affirmatively change anything about the way federal contractors must design and implement affirmative action hiring policies, it did highlight that employers should document efforts to implement diversity policies in race-neutral ways before they begin overtly considering characteristics like race in hiring decisions. Employers that are federal contractors and subcontractors should also endeavor to specifically outline the goals being pursued through using factors like race in hiring decisions. Similarly, employers who are not subject to legally mandated affirmative action plan requirements still need to be extremely careful in adopting voluntary affirmative action programs. As always, when in doubt, employers using or wanting to implement a diversity hiring program should consult with experienced legal counsel to ensure that such programs are implemented appropriately.

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