How SCOTUS' affirmative action ruling could affect corporate diversity

Some hiring practices companies have emphasized in recent years to diversify their workforce could have to change following the Supreme Court's ruling last week striking down affirmative action.

Although corporations are already legally prohibited from making hiring and firing decisions based solely on race, the justices' landmark ruling — which bans race-conscious admissions decisions at higher education institutions — could lead employers to revamp their diversity, equity and inclusion (DEI) programs and hiring practices, experts said.

"A lot of companies expanded their diversity programs in the aftermath of the murder of George Floyd in 2020, and in some cases they may have gone a bit too far — they may have crossed a legal line," New York Times workplace reporter Noam Scheiber told CBS News. "And there's a sense that there could be additional legal scrutiny of that, more cases brought by employees who are passed over for a job or a promotion."

"The court has signaled in its recent decision that it could be pretty skeptical of some of these policies," he added. 

The Supreme Court's ruling has no direct legal effect on workplace laws, but it could be problematic for companies already running afoul of existing federal protections against decisions based on protected traits such as a person's race, gender, or age.

"The bottom line is that the SCOTUS decision on affirmative action has no legal effect on workplace law. Hiring and firing decisions cannot be impacted by protected traits, period. This has been the case for a long time," Laura Mattiacci, the lawyer who represented Shannon Phillips, the former Starbucks manager a jury found was fired because she was White, told CBS MoneyWatch. 

Examples of potentially problematic programs include internship opportunities or leadership training programs that are only open to members of a particular race. 

Firms will likely look closely at their DEI initiatives to make sure they're in compliance with the law, according to Scheiber. "I think it's really a concern about potential legal liability. It's less [about] going in the opposite direction than just trying to put your program on the firmest legal ground you can put it on," he added.

Scheiber expects employers to change their approach to diversity from a focus on race to looking at the kinds of obstacles job candidates must overcome. 

"So I think it's less backing away from these programs than trying to find slightly different rationales, putting them on slightly firmer legal footing," he said. 

Companies will continue to promote diversity in their workplaces, but the court has made clear that they can't take race into consideration even in the interest of building a more inclusive representative organization, according to Wilk Auslander labor attorney Helen Rella.

"In advent of this decision, employers are faced with a situation where they have to carefully examine the policies and procedures they have in place in terms of hiring and workplace-related decisions," she told CBS MoneyWatch. "The court knocking down affirmative action in admissions was clear in stating that discrimination of any kind is not tolerated."

DEI efforts "will be scrutinized and employers may elect to modify them to make sure their policies include statements that make clear they're welcoming and treating all employees fairly — and that they promote inclusion of other groups that were previously not included or who were treated unfairly," she added. 

Employers could also add mission statements that say, in effect, that "all employees are treated fairly in the workplace and should be accepted for what they are — their skills and performance — and not based upon any one factor that has nothing to do with your ability to perform a job or function in the workplace," Rella said.

Amazon told CBS News it is considering the potential implications of the SCOTUS decision. Company spokesperson August Aldebot-Green said that while Amazon remains committed to promoting diversity, equity and inclusion, it will consider the impact of legal decisions on its programs and modify them, if necessary, to comply with the law. 

Others are concerned that making race-based admissions decisions illegal at colleges and universities will stymie the pipeline of minority graduates applying for jobs at companies across the U.S.

"I think the initial impact we'll see is less consideration of applicants of color exiting the university system into the workplace," workforce hiring consultant Ken Oliver told CBS MoneyWatch. "Fewer students of color will be admitted into universities without race-based admission initiatives. It becomes problematic for the future of the country because higher education has this through line into the workforce of America."

Oliver envisions potential workarounds for companies committed to maintaining diverse workforces, such as recruiting candidates from historically black colleges and universities and from other arenas with large minority populations. 

"Companies with great cultures and DEI practices have seen huge returns on their investments in those," he said. "Those companies that are bold and audacious will keep finding ways to create diverse workforces that represent the fabric of American culture without fear of repercussion."