Attorneys Advise New Approach to Diversity and MBE Programs
Recent high court ruling could have wider implications for industry
Original illustration by Getty Images
Last June's U.S. Supreme Court ruling against racial preferences in college admissions has given new life to similar legal efforts that aim to undermine diversity programs and those that award contracts to firms run by minorities, women and disabled people.
While the court’s decision in favor of Students for Fair Admissions Inc., which sued Harvard College and the University of North Carolina, was based on admissions programs at colleges and universities, the language made it clear that the principles discussed go beyond higher education and could have a substantial impact on public works construction.
“We are already seeing how the tentacles of these decisions are spreading outside the college admissions arena,” said Mindy Gentile, an attorney who is of counsel to construction law firm Peckar & Abramson.
Gentile and firm Partner Kim Altsuler provided insights on the rulings at ENR’s 2024 Groundbreaking Women in Construction conference, held May 5-7 in San Diego. ENR produced the GWIC conference for the law firm.
Among the more recent lawsuit targets was one filed last August against law firms that offer scholarships to minority law students; a grant program for Black women entrepreneurs, also was challenged last August, triggering a federal appeals court in Georgia to put the program on hold; the city of Houston's minority subcontractor program — which covers all city subcontractors not just those in construction — was challenged by a white business owner in September; as was the U.S. Dept. of Commerce Minority Business Development Agency program, which a Texas federal judge in March ordered to serve people regardless of race.
Other cases have been aimed at overturning or limiting public works award programs, and have been funded and supported by right-leaning foundations as well as contractor associations.
In the college admissions cases that reached the Supreme Court, the majority held that race cannot be considered a factor in admissions at colleges that accept federal funds, bringing an end to affirmative action as it was practiced at the time.
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“The court’s opinion made it clear that equal protection applies to all,” explained Altsuler, adding that the ruling means “a non-minority has the same rights as a minority.” The court has already flagged that it will use this same analysis when cases in areas other than college admission come before it, she said.
Breaking It Down
Gentile and Altsuler said that while DEI programs vary in scope—some promote diverse voices within the organization, while others are more proactive and may include hiring and promoting goals or quotas—it is the latter more proactive one, that are subject to attack based on the court’s opinion.
It's unclear just exactly how the ruling will play out in the courts. However, since last summer's ruling, “legal action has been filed and threats advanced against companies and agencies challenging their DEI initiatives and MWDBE programs,” Gentile said.
The programs are designed to provide opportunities for historically disadvantaged groups, Altsuler contends, but while they are designed to bring a balance, when a minority has an advantage over a non-minority in contracting, the high court rulings state that "the non-minority is being discriminated against, making it illegal.”
The attorneys urged GWIC attendees to insure industry contractors are educated about how the changing legal landscape affects the construction market—adding that it will be crucial for firms to collect necessary data, do proper studies and conduct a serious and thorough program assessment, regardless of a project’s funding source.
