Section 1981 Counseling and Litigation

Morgan Lewis counsels many of the largest private and public companies, foundations, and nonprofits across the United States regarding how to advance racial equity and diversity, equity, and inclusion (DEI) in their organization without running afoul of the law. In recent years—and particularly since the US Supreme Court held that race-based admissions programs are unconstitutional—litigants are increasingly using Section 1981 of the Civil Rights Act of 1866 to challenge programs and strategies designed to promote racial equity and DEI.

Enacted to ensure equal opportunity for racial minorities, Section 1981 prohibits granting contracts or more favorable contractual terms based on race. Because Section 1981 applies to contractual relationships, litigants argue that it covers various types of racial equity and DEI programs, from supplier diversity programs, private investments and lending programs, and fellowship programs to philanthropic activities and grantmaking.

Our team is actively defending multiple Section 1981 lawsuits that challenge the racial equity programs our clients created to level the playing field for underrepresented racial groups.

How We Can Help

• Evaluate and help mitigate the potential risk of any racial equity or DEI programs or strategies, including:
  • Supplier diversity programs
  • Corporate philanthropy programs
  • Impact or mission-based investment programs
  • Impact or mission-based lending programs
  • Grant programs
  • Fellowship or internship programs
• Advise on corporate or nonprofit mission statements and other internal and external communications discussing racial equity work and programs
• Counsel on the appropriate collection and use of diversity demographic data
• Provide comprehensive training to boards and other stakeholders, including legal teams, program staff, DEI staff, and communications staff, regarding the impact of Section 1981 claims on racial equity programs and strategies
• Defend discrimination claims under Section 1981, California’s Unruh Act, and other antidiscrimination laws