Corporate America could be the next affirmative action battleground

Employers worry that there will be fewer elite job candidates of color coming out of college, and that they could face pressure from conservative groups opposed to diversity hiring and promotion programs.

Dell Technologies was one of the nearly 80 companies who wrote in a brief to the Supreme Court in August that said “diverse workforces improve [our] business performance — and thus strengthen the American and global economies."Brandon Bell/Getty

The Supreme Court’s decision on Thursday to bar consideration of race in college admissions threatens to impede efforts by businesses to diversify their workforces and leadership ranks.

The court, in a 6-3 ruling written by Chief Justice John G. Roberts Jr., said that affirmative action policies at Harvard University and the University of North Carolina at Chapel Hill violate federal anti-discrimination protections.

The decision is expected to lead, at least initially, to lower acceptance rates among Black, Hispanic, and Indigenous applicants at highly selective schools as they seek to remake their admissions policies. In turn, employers may find fewer elite job candidates of color coming out of college, and they could face pressure from conservative groups opposed to diversity hiring and promotion programs.

Let’s walk through some of the potential effects on businesses. Two important notes: The court’s landmark ruling doesn’t apply directly to employers, and federal law already prohibits discrimination in employment decisions based on race, gender, and other factors.

‘Race in a negative manner’

The conservative six-justice majority upended decades of precedent. It ruled that the methods many schools deem essential to building a diverse student body are unlawful under the Equal Protection Clause of the 14th Amendment and, by extension, Title VI of the Civil Rights Act of 1964.

The Harvard and UNC programs “lack sufficiently focused and measurable objectives warranting the use of race, unavoidably employ race in a negative manner, involve racial stereotyping and lack meaningful end points,” Roberts wrote. Universities can still consider an applicant’s discussion of how race affected their life, Roberts said, but “the student must be treated based on his or her experiences as an individual — not on the basis of race.”

Justice Sonia Sotomayor blasted the ruling in her dissent.

“The court subverts the constitutional guarantee of equal protection by further entrenching racial inequality in education, the very foundation of our democratic government and pluralistic society,” she wrote.

Nine states, including California, Michigan, and New Hampshire, previously ended affirmative action admissions at public colleges and universities. Enrollment of underrepresented students of color declined after bans at the University of California campuses in Los Angeles and Berkeley.Damian Dovarganes/Associated Press

Businesses react

Nine states, including California, Michigan, and New Hampshire, previously ended affirmative action admissions at public colleges and universities.

As the Globe’s Hilary Burns reported in April, enrollment of underrepresented students of color declined after bans at the University of California campuses in Los Angeles and Berkeley and at the University of Michigan. Despite some recent improvements, the numbers still lag.

Concerned about their ability to recruit workers, large employers had urged the Supreme Court to preserve admissions programs like Harvard’s and UNC’s.

“Diverse workforces improve [our] business performance — and thus strengthen the American and global economies,” nearly 80 companies, including Bain & Co., Dell Technologies, and General Electric, said in a brief filed in August.

On Thursday, James E. Rooney, CEO of the Greater Boston Chamber of Commerce, said that the court’s decision threatened “the future of our workplaces and business community.”

“Employers will have a less diverse pipeline for the recruitment and hiring of employees,” he said in a statement.

More at stake

Employment experts said it would take time to assess how businesses might be affected by the court’s decision. That’s because lower courts would need to sort out how the ruling might apply in the corporate world.

In a concurring opinion, Justice Neil M. Gorsuch hinted obliquely that corporate hiring practices could come under scrutiny. While Title VI of the 1964 Civil Rights Act prohibits discrimination in any program or activity receiving federal financial assistance, he noted that Title VII of the act bars discrimination by private employers.

Gorsuch wrote that “as Justice [John Paul] Stevens recognized years ago, ‘Title VI and Title VII’ codify a categorical rule of ‘individual equality, without regard to race.’ "

“Title VII might be required to be read to be colorblind, as well,” Kent Greenfield, a Boston College law professor and former Supreme Court clerk, told the Globe’s Mike Damiano.

The Supreme Court’s decision on Thursday to bar consideration of race in college admissions threatens to impede efforts by businesses to diversify their workforces and leadership ranks.Al Drago/Photographer: Al Drago/Bloomberg

Corporate efforts to diversify hiring, suppliers, charitable giving, and even socially responsible investing could carry “potential legal and reputational risks,” said Grace Speights, partner and leader of Morgan Lewis’s global labor and employment practice.

As Anheuser-Busch learned recently after its marketing promotion with a transgender influencer sparked a boycott of Bud Light, backlash against companies taking what could be perceived as political or social stands can be punishing.

Federal contractors, meanwhile, are required by the government to take “affirmative action” steps to recruit and advance qualified minorities, women, individuals with disabilities, and protected veterans.

A challenge to that requirement is very likely, Stephen Paskoff, a former lawyer at the Equal Employment Opportunity Commission, told The New York Times.

The future

There also will be broader challenges to corporate diversity, equity, and inclusion policies, according to Juliette Mayers, CEO of Inspiration Zone, a Boston strategic consulting firm.

She expects companies committed to DEI to find ways to continue their efforts.

“Companies that see diversity as part of their value system and the competitive advantage that they have will not retreat,” she said. “Others, the check-the-boxers, will find it easier to back out. This will definitely be a test for companies.”