The US Supreme Court issued a landmark decision on June 29, 2023 regarding challenges to race-conscious admissions programs at Harvard University and the University of North Carolina (UNC). In a 6–3 decision split along ideological lines (the vote was 6–3 in Students for Fair Admissions, Inc. v. University of North Carolina and 6–2 in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College with Justice Jackson recused), the Supreme Court held that Harvard and UNC’s race-conscious admissions policies fail strict scrutiny and thus violate the Equal Protection Clause of the Fourteenth Amendment to the US Constitution.
While this decision is about university admissions and the Equal Protection Clause, there are potential implications for diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives in other spaces, such as employment, contracting, investing and lending, and charitable giving.
Students for Fair Admissions, Inc., a legal advocacy group seeking to end the use of race in university admissions programs, filed the cases against Harvard and UNC. The group contended that Harvard’s program violates Title VI[1] by using race as a factor in admissions and limiting Asian American acceptance rates in comparison to other comparably qualified students through “racial balancing.” Similarly, it alleged that UNC’s process violates Title VI and the Equal Protection Clause of the Fourteenth Amendment by considering race in admissions.[2]
Both Harvard and UNC argued that their programs are consistent with the standards set in prior Supreme Court cases. In the seminal case Regents of University of California v. Bakke, the Supreme Court held in 1978 that a college or university could lawfully consider an applicant’s race without violating Title VI or the US Constitution if the university were seeking to further student diversity and if race were one factor among many considered in a holistic evaluation of the candidate. That analysis barred universities from using racial quotas but permitted a range of race-conscious recruitment and admissions programs. The Supreme Court reaffirmed that holding in 2003 in Grutter v. Bollinger and again in 2016 in Fisher v. University of Texas.
UNC also argued that the other race-neutral methods it tried for the purpose of furthering student diversity failed, leaving the race-conscious program as the only effective way for the university to pursue student diversity.
Harvard’s program was upheld by a federal district court and the US Court of Appeals for the First Circuit prior to reaching the Supreme Court. UNC’s program was upheld by a federal district court, but Students for Fair Admissions appealed the case directly to the Supreme Court before the Fourth Circuit could consider it.
The Court did not expressly overrule Grutter v. Bollinger and its progeny but instead purported to apply it. However, in its decision, the Court focused heavily on the limitations those decisions imposed and their admonitions that there must be a point when the need for race-based admissions practices ends.
The Court found that Harvard and UNC’s programs fail strict scrutiny under Grutter for several reasons.
Universities’ Justifications Are Immeasurable
First, the Court held that the universities’ proffered justifications for using race-conscious admissions programs “lack sufficiently focused and measurable objectives warranting the use of race.” Those justifications included training future leaders, better educating through diversity and diverse outlooks, promoting the robust exchange of ideas, broadening understanding, and preparing engaged and productive citizens.
The Court called these “commendable goals” but found them “not sufficiently coherent for purposes of strict scrutiny.” The goals cannot be subjected to meaningful judicial review, the Court found, because they cannot be measured and there is no way to determine when they have been reached.
The Court contrasted the universities’ goals with the sort of objectives that may qualify as a compelling interest for purposes of strict scrutiny, including “remediating specific, identified instances of past discrimination that violated the Constitution or statute” and “avoiding imminent and serious risks to human safety in prisons, such as a race riot.”
No Meaningful Connection Between Universities’ Means and Goals
Second, the Court found there was no “meaningful connection between the means” the universities “employed and the goals they pursue.” This is because the race categories the universities use were imprecise—some overinclusive and some underinclusive—and did not capture all groups that might constitute an underrepresented racial minority.
In light of the lack of fit between ends and means, the Court refused to defer to the universities’ academic decisions, as it had done in prior decisions.
Race Cannot Be a ‘Plus’ Factor in Zero-Sum Contexts Without Also Being a ‘Negative’ Factor
Third, while precedent allows race to be used as a “plus” factor, it forbids using race as a “negative” factor in decision-making. The Court determined that using race as a plus factor in this context will “unavoidably employ race in a negative manner” because it viewed the nature of college admissions as “zero-sum.”
Universities’ Justifications Perpetuate Racial Stereotypes
Fourth, the Court found that the universities’ asserted justifications improperly rely on and perpetuate racial stereotypes. The Court reiterated Grutter’s holding that admissions programs cannot be based on a “belief that minority students always (or even consistently) express some characteristic minority viewpoint on any issue.”
As the Court saw it, the universities’ admissions processes “tolerate the very thing that Grutter foreswore,” by assuming “that there is an inherent benefit in . . . race for race’s sake,” and that students of a particular race think alike or have the same life experiences.
Programs Lack Meaningful Endpoints
Finally, the Court found that Harvard and UNC’s programs “lack meaningful endpoints.” The universities had no plans to sunset their race-based admissions decisions, contrary to Grutter’s expectation that such practices persist for one more generation and no more.
Not All Race-Related Considerations Blocked
The majority did not foreclose all race-related considerations in college admissions. The Court made clear that its opinion should not 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.”
But the Court cautioned that “universities may not simply establish through application essays or other means the regime we hold unlawful today.” Instead, “[a] benefit to a student who overcame racial discrimination, for example, must be tied to that student’s courage and determination. . . . In other words, the student must be treated based on his or her experiences as an individual—not on the basis of race.”
Grutter Is Not Expressly Overruled
The majority’s decision claims to be faithful to Grutter, yet it gives Grutter’s limitation much greater force. Justice Thomas wrote separately “to explain further the flaws of the Court’s Grutter jurisprudence” and joined the majority decision because it “applies genuine strict scrutiny to the race-conscious admissions policies,” suggesting he believes Grutter applied something less.
In another concurrence, Justice Kavanaugh opined that “the Court’s decision today appropriately respects and abides by Grutter’s explicit temporal limit on the use of race-based affirmative action in higher education.”
Focused on Higher Education
The Court’s decision is focused exclusively on college admissions practices and the proper analysis under the Equal Protection Clause. The majority noted, in a footnote, that it has observed in prior cases that violations of the Equal Protection Clause also violate Title VI and that the parties did not take issue with analyzing both claims under the constitutional standards. Only Justice Gorsuch’s concurring opinion (joined by Justice Thomas) opines in detail on whether the practices also violated Title VI of the Civil Rights Act.
Historically, decisions in this context have provided the foundation for how private companies have structured DEI efforts. But, the decision turns, at least in part, on factors that are uniquely universal in the college admissions context—especially the zero-sum nature of the process.
It thus remains to be seen whether and precisely how the decision will impact the way courts decide reverse discrimination claims and other challenges to DEI efforts in the private sector.
It can be expected that courts will face arguments that this decision applies to other contexts where race is a factor in decision-making—potentially including DEI efforts related to employment, vendor contracting, charitable giving, and investment and lending.
In particular, we anticipate that legal advocacy groups, like the one that brought the Harvard and UNC cases, and like-minded individual lawyers will use this decision to challenge the legality of such DEI efforts and seek to extend the impact of the decision beyond the admissions process in higher education.
For example, America First Legal Foundation (AFLF)—a conservative legal advocacy group—submitted an amicus brief in the Harvard case arguing that Title VI “makes no allowance for racial considerations . . . with no exceptions for ‘compelling interests,’ ‘diversity,’ or ‘strict scrutiny.’” AFLF already has asserted challenges to employers’ DEI programs, such as by submitting letters to the Equal Employment Opportunity Commission and asking the agency to investigate private employers’ DEI programs as improper under Title VII.
We also have seen lawsuits challenging supplier diversity programs and state-funded programs that take race into account.
All Organizations
Based on the potential implications of this decision, prudent organizations should do the following:
Higher Education
Colleges and universities should evaluate the role that race currently may play in their admissions processes and devise race-neutral approaches they can implement prior to the next admissions cycle.
It also will be important to coordinate with institution-wide public relations personnel and stakeholders to prepare messaging about the Supreme Court’s decision and its implications. Prospective and current students and members of the campus communities likely will be interested in understanding the institution’s views on the impact of this ruling.
Employers
Employers should continue to train managers on what DEI is and is not, and to remind employees that DEI does not mean that they should interview, hire, or promote individuals of a certain race or gender simply to meet diversity goals.
Ultimately, all DEI initiatives that are race-based or might be interpreted as race-based will now carry some element of risk, but complete disengagement from DEI initiatives carries risk as well. Therefore, any assessment of a company’s engagement with DEI initiatives should analyze not only the legal risks associated with those DEI initiatives, but also risks from disengaging from or reducing any DEI commitments.
For example, if an employer curtails or eliminates its DEI programs and the representation, equity, or inclusion of women or people of color remains stagnant or decreases, the risk of a traditional discrimination lawsuit may increase. There is also the potential risk of a shareholder derivative suit challenging the company’s decision to change its publicly stated diversity commitments.
Moreover, there are reputational and employee relations risks, especially where a company (or alternatively, its competitor) already has made public DEI or ESG commitments. There are also business and operational risks, as studies show that more diverse teams are more productive and profitable than less diverse teams.
In our July 11 webinar, Affirmative Action Decision: Impact on DEI and ESG—Considerations for Universities and Colleges, Employers, and Other Organizations, we will discuss our observations about this landmark ruling and the potential impact it will have within and outside the education industry.
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Morgan Lewis lawyers are working closely with our clients on these issues. We help organizations evaluate their existing DEI and ESG programs and practices to maintain forward progress while navigating potential legal and reputational risk. Our firm and our lawyers stand ready to assist colleges, universities, employers, and organizations of any type that may be impacted by the Supreme Court’s ruling.
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[1] Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, and national origin in any program or activity receiving federal financial assistance. Harvard, UNC, and most colleges and universities are subject to Title VI because they receive federal financial assistance, such as research grants and federal student aid. UNC and other state universities are also subject to the limits imposed by the US Constitution because they are state actors.
[2] The Equal Protection Clause prohibits federal and state governments from discriminating on the basis of race except when furthering a compelling government interest and using the least restrictive means available.