January 1, Corporate Diversity Overhauls Spark Legal Firestorm Among Conservatives

Several major U.S. companies have modified their internal diversity policies that aim to increase racial and ethnic representation after conservative groups threatened to file lawsuits, according to a Reuters review of corporate statements.

At least six major U.S. companies, including JPMorgan Chase, revised their diversity policies after they were among the 25 firms that received public shareholder letters since 2021 that said their diversity, equity and inclusion (DEI) programs constitute illegal discrimination and breach the directors’ duties to investors.

Reuters found that the main changes made by the companies involved the removal of language that indicated certain programs were for members of underrepresented groups, or they modified the executives’ goals for increasing racial diversity in the workforce. However, the outlet was unable to directly link the changes to diversity programs to the lawsuit threats.

For the other 19 companies that received shareholder letters about the legality of firms’ DEI initiatives, Reuters was unable to find publicly available changes. Some of those companies received shareholder letters in the wake of releasing their most recent annual reports that outlined some of the controversial policies.

JPMorgan received a letter in May 2022 that alleged 10 of its DEI programs were discriminatory and illegal. Around February 2023, descriptions of the bank’s “Advancing Hispanics & Latinos” and “Advancing Black Pathways” programs were changed, according to archived versions of the company website viewed by Reuters.

Those programs now invite applications from all students “regardless of background.” JPMorgan spokesperson Allison Kahl told the outlet, “We remain fully committed to an inclusive workforce made up of top talent.”

The world’s largest asset manager, BlackRock, received a letter on the topic in April and removed language that said a scholarship was “designed for” members of specific underrepresented groups. A BlackRock spokesperson told Reuters that the company was proud to expand eligibility for the scholarships.

The letters sent to companies have come from two conservative legal groups, including the American Civil Rights Project, founded by Texas attorney Dan Morenoff, and America First Legal, which is led by Stephen Miller, who was an adviser to former President Trump.

DEI programs and related initiatives proliferated at many major U.S. companies after the police killings of George Floyd in 2020 and other Black Americans amid calls for addressing racial disparities in corporate leadership.

A Supreme Court ruling from June 2023 that found that the use of affirmative action in universities’ admissions decisions was unconstitutional gave new momentum to conservative efforts to rollback corporate DEI initiatives.

However, the ruling didn’t directly affect companies, which are subject to anti-discrimination laws that prohibit the consideration of race and gender in individual hiring decisions. DEI programs that broaden the pool of applicants and remove barriers to advancement are considered legal.

Why It Matters (op-ed)

The recent revision of diversity policies at major U.S. companies like JPMorgan Chase reveals the growing tension between DEI initiatives and conservative groups.

While companies aim to address racial disparities in corporate leadership, these groups argue that such efforts breach directors’ duties to investors and constitute illegal discrimination.

The Supreme Court’s recent ruling on affirmative action in universities has fueled these conservative efforts, but it’s essential to remember that DEI programs that broaden applicant pools and remove barriers are considered legal.

As companies navigate this evolving landscape, striking a balance between DEI goals and legal compliance will be crucial to fostering inclusive workforces.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.

Source