What the Schools Cases Mean for the Workplace

The following analysis was written by Eric Dreiband, a Labor and Employment partner in Akin Gump’s DC office. Prior to joining the firm, he was the general counsel of the EEOC. Several weeks ago, another former GC of the EEOC, Don Livingston, discussed key implications of the Ledbetter decision in this post.

Although Thursday’s decision in Parents Involved in Community Schools v. Seattle School District rejected race-conscious school assignment programs, its rationale about the use of race will extend beyond schools to employment and other areas. Parents Involved will also add fuel to the anti-diversity fire that has been raging in the federal courts in the four years since Grutter v. Bollinger decided that race-conscious diversity programs in higher education can be lawful. The case is also likely to have a significant impact beyond the educational arena: the federal courts will strike down employment diversity programs that seek nonremedial “racial balancing,” and diversity plans that explicitly consider race in employment are vulnerable to Title VII challenges.

Title VII And Diversity Programs

Title VII of the Civil Rights Act of 1964 makes it unlawful to “discriminate” against any individual in employment “because of” race, sex, and other protected characteristics. The Court’s 1979 decision in United Steelworkers of America v. Weber held that Title VII permitted a voluntary race-conscious affirmative action plan that sought to “eliminate manifest racial imbalances in traditionally segregated job categories.” Title VII permitted the plan, the Court explained, because it sought to “break[] down old patterns of racial segregation and hierarchy”; did not “unnecessarily trammel” the interests of non-minority employees; and was temporary.

Eight years later, in 1987, the Court decided Johnson v. Transportation Agency and again rejected a Title VII challenge to an affirmative action plan. Paul Johnson claimed, unsuccessfully, that his employer violated Title VII when it promoted Diane Joyce over him. The Court found the employer’s explicit consideration of Joyce’s sex was permissible because it “was made pursuant to an Agency plan that directed that sex or race be taken into account for the purpose of remedying underrepresentation.” The Court said the plan survived Johnson’s Title VII challenge because the employer implemented the plan to eliminate “a conspicuous . . . imbalance in traditionally segregated job categories.” The Court warned that “blind hiring by the numbers” could “fairly be called into question,” and the Court cautioned against decisions “made by reflexive adherence to a numerical standard.”

Title VII And Grutter

The Court has said nothing about Title VII and diversity programs since Johnson, but, from 2003 until Thursday, the federal courts looked to Grutter (as well as Weber and Johnson) for guidance about Title VII challenges to diversity programs. In Grutter, the Court decided that race may be a “‘plus’ factor” in higher education admissions decisions so long as there is “truly individualized consideration” that considers race in “a flexible, nonmechanical way.” Like Johnson, Grutter emphasized that “mechanical, predetermined diversity ‘bonuses’ based on race or ethnicity” are unlawful, as are quotas.

After Grutter, the United States Courts of Appeals for the Third, Fifth, Seventh and Eighth Circuits sustained Title VII challenges to race-conscious diversity programs used by the cities of Milwaukee, Newark, Shreveport, Chicago, and Omaha, as well as at least one major private employer, Xerox Corporation. And, perhaps surprisingly, the courts cited Grutter as compelling the conclusion that the challenged diversity programs violated Title VII. See Alexander v. City of Milwaukee, 474 F.3d 437 (7th Cir. 2007); Lomack v. City of Newark, 463 F.3d 303 (3d Cir. 2006); Kohlbek v. City of Omaha, 447 F.3d 552 (8th Cir. 2006); Dean v. City of Shreveport, 438 F.3d 448 (5th Cir. 2006); Biondo v. City of Chicago, 382 F.3d 680 (7th Cir. 2004); Frank v. Xerox Corp., 347 F.3d 130, 133, 137 (5th Cir. 2003).

Whither Diversity In Employment?

Parents Involved guarantees that the federal courts’ antagonism towards employers’ diversity plans will continue. Parents Involved determined that the challenged student assignment plans were unlawful because “when race comes into play, it is decisive by itself.” And, the Court reaffirmed Grutter‘s conclusion that “racial balancing” is “patently unconstitutional.”

The Court said that it has permitted “racial classifications” in only two circumstances: (1) when “remedying the effects of past intentional discrimination”; and (2) when “the diversity interest” in higher education was “not focused on race alone.”

This rationale is consistent with Weber, Johnson, and Grutter. But Parents Involved could be read as limiting Grutter to higher education. The Court said that Grutter “relied upon considerations unique to institutions of higher education.” The Court described this “unique context” as one of Grutter‘s “key limitations.” If Grutter‘s diversity rationale does not extend to Title VII – a very real possibility after Parents Involved – racial classifications in employment will be permitted only as part of remedial programs that seek to correct a “manifest imbalance” of the kind at issue in Weber and Johnson.

Justice Kennedy: Salvation For Employer Diversity Plans?

Justice Anthony Kennedy’s concurring opinion in Parents Involved is not likely to change the courts’ hostility to Title VII diversity programs. It does, however, provide guidance that may help define the parameters of a Title VII-compliant diversity program. Justice Kennedy would permit “facially race-neutral means” because they provide a “more nuanced, individual evaluation . . . that might include race as a component.” He would also permit some “race-conscious measures” such as “strategic site selection of new schools; drawing attendance zones with general recognition of the demographics of neighborhoods; allocating resources for special programs; recruiting students and faculty in a targeted fashion; and tracking enrollments, performance, and other statistics by race.”

Justice Kennedy’s opinion is consistent with Weber and Johnson, and it provides guidance regarding how to structure diversity plans that can pass constitutional muster. For example, employers may engage in “race conscious” measures that include “strategic site selection” and “recruiting . . . in a targeted fashion.” Employers may also track their hiring, pay, and promotion statistics for race (as well as gender and other protected characteristics). If Justice Kennedy’s rationale extends to Title VII — something that is not clear – employers may go further: they may use “facially race neutral” means that “might include race as a component.”

After Thursday’s decision, it seems clear that in the absence of a “manifest imbalance,” an employer will expose itself to Title VII liability if it uses a diversity plan that seeks a “racially balanced” workforce by explicit consideration of race or other protected traits. Parents Involved will add to the courts’ post-Grutter skepticism about workplace diversity programs, and may increase it.