Are employers’ efforts to improve diversity in the US risking potential lawsuits? The risk is a real one and it’s playing out in the courts across a number of states. We’ll hear from a New York lawyer on that, and how it links to the gathering and sharing of data by employers. If your business has a presence in the US, it’s an issue to be aware of.
As in the UK, employers in the states are striving to attract and retain talent and diversity and inclusion is a big factor. The Washington Post’s headline ‘Going deeper with diversity and inclusion’ talks about how US companies are striving to find ways to ensure their employees can be themselves and thrive. It makes the point that there is now ‘a greater expectation that companies are going to do something about it.’ And on the whole, businesses are responding.
In the US, the concept of ‘equity’ and ‘systemic racism’ has become highly politicised and caught up in ongoing debates about ‘Critical Race Theory’, a subject that has exploded in the public arena. The core idea is that race is a social construct, and that racism is not merely the product of individual bias or prejudice, but also something embedded in legal systems and policies.
For businesses navigating this, it’s a potentially contentious issue which means rolling out D&I strategies across the business carries a risk. For example, in a case last year two white, Jewish, University of Stanford professors filed federal and state complaints alleging that the university’s D&I training created an unlawful hostile work environment. The professors claimed that they were pressured into racially segregated “whiteness accountability affinity groups” as part of the D&I program and that the training “maligned and marginalized Jews.
In that case it was training materials, specifically, that armed the employees with the evidence they needed to bring their claims, but the issue goes wider than that. Employers’ efforts to improve diversity and equality necessarily involves gathering an array of data and acting on it, but therein lies the problem: employees able to access the data may have their own agenda.
So, let’s consider that. Ben Stockman is a lawyer with law firm Venable and earlier he joined me by video-link from New York. I asked him about the issue of sharing data with staff:
Ben Stockman: “So the issue with the increased access to data which largely has come as a result of the passage of laws at the state level - California is a good example of a state that has passed some pay transparency laws recently. The issue there is that employees now have access to pay data and also, increasingly, as employers engage in diversity, equity, inclusion initiatives, they are voluntarily making data available related to the demographics of their workforce. As a result of all this I think it's increased expectations from employees as to what information employers must provide to them, and then what employers must do when the employees have had a chance to digest that information and then come back to the employer with certain expectations as relates to pay, and also diversity initiatives. So, we are seeing anecdotally here as lawyers, an increase in novel issues raised by employees at the management level in addition to rank and file where we've seen cases of situations where management-level employees are advocating for their subordinates when it comes to pay, when it comes to issues related to diversity, which is something that's really quite new and presents thorny issues for employers to confront.”
Joe Glavina: “The access to data issue is an interesting one. So, sharing data is good when it comes to moving forward on diversity, but risky if it leads to lawsuits. So how are employers, your clients, managing that?”
Ben Stockman: “So, employers are right now in a period adjusting to implementing compliance with some of the new laws that have passed across the country related to pay transparency and it’s a bit of a patchwork approach by the states. Not every state has passed a pay transparency law, by the way, but the states that have all have passed similar but slightly different versions of the law and there's some thorny compliance issues that employers are confronting. For example, in some of the states, Colorado is an example, you have a law which states that employers must make public the salary ranges for open positions but there's a second piece of the law which extends that public posting to positions that come open internally, that the employer may not have otherwise intended to make public. So, that's one example of issues that employers are wrestling with. Additionally, we're seeing, and this is a result of increased employee activism, demands coming from employees related to pay data, for one, but it's not always the case that the employee fully understands the law so the demand may take the form of a broader set of demands or complaints and the employer then must pick through and try to determine what, under the pay transparency laws for example, is required to be provided the employee versus what are the complaints that the employee may not necessarily have access to the data they are seeking. So, these are the types of issues we're seeing. They’re novel, there still isn't a lot of guidance out under these new laws in the states, so employers are trying their best to be in compliance with limited amount of information at this point.”
Joe Glavina: “That’s interesting, Ben. Are there any other developments we should be aware of?”
Ben Stockman: “The only other interesting thing that's going on right now in the United States with regard to diversity, equity, inclusion that I wanted to discuss was that with the increase in voluntary participation by employers in these initiatives, employers are making an increasing amount of information available to the public that relates to these initiatives. This data, in some cases, has been used as a basis to file lawsuits attacking the affirmative action, or diversity equity inclusion initiatives, of employers on a so-called ‘reverse discrimination’ theory. Two of these cases have been consolidated by the United States Supreme Court, one involving Harvard University, the other involving University of North Carolina. Oral argument has been completed on those cases and the Supreme Court will weigh in, we anticipate in June, with a decision that might shift the ability of universities, in the first instance, but have larger implications for affirmative action and diversity, equity, inclusion initiatives. So, that will be an interesting case when that opinion comes down. We expect that in the spring.”
Those two university cases Ben mentioned have been reported over here by the BBC in ‘US Supreme Court takes up race-based college admissions’. As they explain, proponents of affirmative action say that it helps rectify societal, economic, and historical inequities that prevent some minority groups from gaining access to the most elite educational institutions in the US. However, critics argue that considering race in university admissions is discriminatory, and that these policies come at the expense of other groups or individual students. The Supreme Court’s ruling is expected in the middle of next year and we’ll return to this issue when we get that ruling.