Attorneys Address Implications for Employers Of Justices' Latest Affirmative Action Ruling

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Patrick Dorrian  

 

The rules governing affirmative action and diversity in employment were not directly affected by the U.S. Supreme Court's latest decision in an education case, but employers should exercise caution when considering race as a factor in hiring or recruitment, a panel of attorneys advised July 18 during an employment law seminar.

The panel was assembled by the American Law Institute to discuss the future of diversity and affirmative action in employment and other contexts in the wake of the justices' June 24 decision in Fisher v. University of Texas,118 FEP Cases 1459 (2013).

In Fisher,J.P. Schnapper-Casteras explained, the Supreme Court remanded the case to the U.S. Court of Appeals for the Fifth Circuit for a fuller examination of whether the University of Texas's consideration of race in its undergraduate admissions policy satisfies constitutional “strict scrutiny” requirements.

Schnapper-Casteras, who is with the management firm Sidley Austin in Washington, D.C., said the case was brought by a white applicant who was denied admission to the university. The applicant contends that less-qualified black applicants were admitted instead of her, and that the university's consideration of race as a factor in admissions violated her equal protection rights to be free from race discrimination.

Under Supreme Court case law, the use of a racial classification by a state university to achieve a more diverse student body is inherently suspect and must be shown to satisfy a compelling governmental interest and to be precisely tailored to serve that interest. Such classifications are subject to “strict scrutiny,” or the most stringent standard of judicial review.

Decision Relied on Prior Cases

Session moderator Frank C. Morris Jr. of Epstein Becker & Green in Washington, D.C., asked what impact Fisher has on the court's existing affirmative action/diversity decisions.

Schnapper-Casteras responded that there is “a lot of debate about what the decision means.” However, he noted, the justices in Fisher relied on the “core” of those earlier cases--Grutter v. Bollinger, 539 U.S. 306, 91 FEP Cases 1761 (2003); Gratz v. Bollinger, 539 U.S. 244, 91 FEP Cases 1803 (2003) (55 BTM 14, 1/8/04); and University of California v. Bakke, 438 U.S. 265, 17 FEP Cases 1000 (1978).

Fisher “leaves us in pretty much the same place as before,” Professor Michael L. Foreman of the Pennsylvania State University Dickinson School of Law in State College, Pa., said. In essence, he said, all the justices did was hold that there is no “strict scrutiny-light.”

From a legal standpoint, Bakke's “precisely-tailored” requirement still applies, and from a factual-context standpoint, the case really is not readily transferable to other academic settings, Foreman said.

He added that, from a political standpoint, there was some sense when the justices took the case that they were getting ready to reverse Grutter, but that clearly did not prove to be so. The parties did not actually ask them to overturn Grutter, “but that hasn't stopped this court before,” he said, pointing to Gross v. FBL Financial Services Inc., 557 U.S. 167, 106 FEP Cases 833 (2009), in which the justices held that “but-for” cause must be shown to prove discrimination under the Age Discrimination in Employment Act even though that question was not technically before the court.

Under Bakke, race can be only a modest factor in a public university's admissions standards, Foreman said. He thinks Justice Anthony M. Kennedy, who wrote the majority opinion in Fisher, found that it might have been a more significant factor than that in the University of Texas's standards.

Foreman said if there are other reasonable means for potentially achieving a desired diversity goal, they must be explored before resorting to the use of race as a factor. But “all possible” alternatives do not have to be exhausted first, he added.

What Is the Impact for Employers?

Rae T. Vann of Norris, Tysse, Lampley & Lakis in Washington, D.C., said that because Fisher did not involve any workplace rights issues, the case has no direct impact for private-sector employers. However, it may have some indirect influence given the court's renewed acceptance of the possible use of race as a factor to achieve diversity.

On the other hand, the decision could be viewed as confirming the court's increasing skepticism toward the use of racial considerations, she cautioned.

In the same vein, she added, Fisher could be seen as signaling that further reliance on the Equal Employment Opportunity Commission's 1979 policy guidance--which permits consideration of race and other protected classifications if done pursuant to a reasonable analysis--might now be risky.

Vann's firm manages the D.C.-based employer advocacy group, the Equal Employment Advisory Council, for which she serves as general counsel.

Federal contractors are subject to Executive Order 11246, which is enforced by the Labor Department's Office of Federal Contract Compliance Programs. In addition to prohibiting contractors from discriminating on the basis of race, color, and other protected characteristics, EO 11246 also requires them to take affirmative action to ensure that equal employment opportunity is provided to all job applicants and employees.

Johnson/Weber Still Safer

For employers, Vann said, the default standard should still be the test established in Johnson v. Transportation Agency, Santa Clara County, 480 U.S. 616, 43 FEP Cases 411 (1987), and United Steel Workers v. Weber, 443 U.S. 193, 20 FEP 1 (1979).

Those cases held that an employer defending an affirmative action plan under Title VII of the 1964 Civil Rights Act must show that the plan is intended to remedy a “manifest imbalance” in a historically segregated job category, and that it is narrowly tailored to achieve that purpose.

So employers should not use race-based considerations “willy-nilly,” Vann advised.

She agreed with Foreman that Fisher and other post-Johnson/Weber cases may be read as an indication by the justices that private employers now have more latitude to use race for diversity-based purposes.

However, Vann added that Johnson and Weber are both older cases, and the manifest historical imbalances that the court had in mind at the time of those decisions may no longer be as prevalent. Under that analysis, race may now be less of an acceptable factor in policymaking and decisionmaking in the employment arena.

Employers Advised to Use Caution

Vann and Foreman both stressed that Fisher and Grutter were not employment cases.

The court often has focused on the benefits of diversity in the educational context, but it has never done so in the employment context, Foreman said.

He added that another possible takeaway from the Fisher opinion is that Kennedy has a problem with the use of race as a tiebreaker when making a decision on affirmative action or diversity grounds. But Kennedy clearly does not have a problem with casting a wider net to increase diversity, he said.

“Casting a wider net” to ensure equal employment opportunities “is the perfect way to describe” what might be seen as acceptable employer conduct, Vann said. But because neither Fisher nor Grutter was an employment case, “we really don't know,” she cautioned. “I'm not sure” that the notion of diversity as being important, which is accepted in the educational context, “translates to the employment context,” she said.