Corporate diversity policies may face scrutiny after Supreme Court's affirmative action ruling

The Supreme Court’s ruling rejecting the use of affirmative action policies by colleges could lead to new scrutiny of corporate diversity initiatives.

Justices were divided along ideological lines, with the six conservative-leaning justices holding that Harvard University and the University of North Carolina violated the equal protection clause of the Constitution’s Fourteenth Amendment by considering race in their admissions decisions.

"A benefit to a student who overcame racial discrimination, for example, must be tied to that student’s courage and determination," Chief Justice John Roberts wrote in the majority opinion. "In other words, the student must be treated based on his or her experiences as an individual–not on the basis of race. Many universities have for too long done just the opposite. And in doing so, they have concluded, wrongly, that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned but the color of their skin. Our constitutional history does not tolerate that choice."

The Supreme Court’s decision could open the door to challenges to corporations’ diversity initiatives, which have proliferated in recent years. Federal law prohibits the consideration of race and other protected characteristics like age, religion, sex – including sexual orientation, gender identity, or pregnancy – national origin, disability or genetic information in corporate hiring decisions.

SUPREME COURT REJECTS AFFIRMATIVE ACTION IN RULING ON UNIVERSITIES USING RACE IN ADMISSIONS DECISIONS

Many corporations have sought to diversify their workforce by trying to recruit qualified candidates from more diverse pools of applicants or through training programs that offer opportunities to members of groups that a company believes are underrepresented in their management teams. Such initiatives are often part of a company’s broader diversity, equity and inclusion (DEI) program.

Those initiatives could spur legal challenges in the wake of the ruling. Charles Elson, a corporate lawyer and founding director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, told FOX Business’ Eleanor Terrett that the decision "certainly could change DEI policies" and that "there will be a lot of lawsuits" at companies that considered race in hiring or promotion decisions.

DIVERSITY, EQUITY AND INCLUSION JOBS SLASHED AT HIGHER RATE THAN OTHERS IN RECENT LAYOFFS

While the Supreme Court was considering the case it decided Thursday, several major U.S. corporations signed on to a legal filing – known as an amici curiae ("friends of the court") brief – that was provided to the court in support of the colleges’ use of affirmative action policies and consideration of racial demographics in their admissions decisions.

"Diverse workforces improve Amici’s business performance – and thus strengthen the American global economies," the companies’ brief stated. "Amici seek employees who have been educated at universities with exposure to a broad array of life experiences and viewpoints, and who can bring diverse perspectives and experiences to the workplace. An essential part of the diversity Amici seek is racial and ethnic diversity. Given these priorities, Amici have a significant interest in how universities consider and admit applicants: they rely on the nation’s schools to educate and train their future workers."

DISNEY CHIEF DIVERSITY OFFICER DEPARTS AFTER YEARS OF PROGRESSIVE CONTROVERSIES DOG COMPANY

General Motors, one of the companies that signed on to the brief in support of the colleges’ use of affirmative action, told FOX Business that "GM remains committed to fostering a culture that embraces diversity, equity, and inclusion and will continue our work to cultivate a pipeline of talent that reflects our customers and the communities in which we live and work."

Ticker	Security	Last	Change	Change %
GM	GENERAL MOTORS CO.	51.55	-1.17	-2.21%
JNJ	JOHNSON & JOHNSON	160.14	-1.46	-0.90%
META	META PLATFORMS INC.	593.28	+15.12	+2.62%

A spokesperson for Johnson & Johnson, another signatory, told FOX Business, "Johnson & Johnson believes a diverse, equitable and inclusive workforce and environment enables the delivery of positive business outcomes and cultivates innovation, which benefits the patients we serve. The values of diversity, equity and inclusion have long been part of our culture and our rooted in our Credo."

"We hire and advance individuals strictly on merit, based on the skills and competencies most needed by our business now and for the future. We also believe higher education plays a significant role in creating equitable opportunities for individuals to reach their full potential and in developing the diverse talent that corporations need to thrive. We recognize the tremendous value of equitable access to educational opportunities that permit individuals to reach their full potential and we remain steadfast in our commitment to foster a diverse, equitable and inclusive workforce and environment," the Johnson & Johnson statement concluded.

Ticker	Security	Last	Change	Change %
AAPL	APPLE INC.	233.67	+0.27	+0.12%
ADBE	ADOBE INC.	485.39	+4.35	+0.90%
GE	GE AEROSPACE	174.09	-1.23	-0.70%
GOOGL	ALPHABET INC.	169.68	+2.96	+1.78%
KHC	THE KRAFT HEINZ CO.	34.80	-0.33	-0.94%
MRK	MERCK & CO. INC.	103.79	-0.46	-0.44%
CRM	SALESFORCE INC.	298.88	+5.13	+1.75%
SBUX	STARBUCKS CORP.	97.39	-0.63	-0.64%

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Meta, the parent company of Facebook, which also signed on to the brief, declined to comment.

Several other companies that participated in the legal brief backing the colleges’ use of affirmative action, including Apple, Adobe, General Electric, Google, Kraft Heinz, Merck, Salesforce and Starbucks, did not respond to requests for comment.

FOX Business’ Charlie Gasparino and Eleanor Terrett contributed to this report.