Last year, the US Supreme Court ruled in SFFA v. Harvard that discriminating on the basis of race in college admissions violates the equal protection clause of the 14th Amendment.1 As a result, the legality of corporate affirmative action programs was called into question2 and thirteen Attorneys General warned that SFFA implicated corporate affirmative action programs.3

This year, those implications widened when the Supreme Court ruled in Muldrow v. City of St. Louis that Title VII of the Civil Rights Act protected against discriminatory job transfers.4 The ruling lowered the bar for employees to successfully sue their employers for discrimination,5 and is therefore likely to lead to an increase in discrimination claims.

Finally, [t]he Eleventh Circuit recently held that a company that offered grants only to minority entrepreneurs violated the Civil Rights Act’s prohibition against race-based contracts in American Alliance for Equal Rights v. Fearless Fund.6 Requiring vendors and other business partners to implement affirmative action initiatives similarly discriminates on the basis of race.

Around the same time as SFFA, Starbucks was successfully sued for “reverse discrimination” with damages of $25.6 million,7 and the risk of being sued for such discrimination is rising.8

Despite these obvious risks, Netflix apparently continues to practice affirmative action in at least the following ways: (1) “Netflix contributions supported [Black Economic Development Fund]’s investment of nearly $212 million in black-led transactions: $17 million in deposits to Black-owned banks; $29 million to Black-owned businesses; and over $166 million in Black-led real estate developers”;9 (2) Netflix committed $140 million “into Black banks and similar financial institutions”;10 (3) “In 2023, [Netflix] spent nearly $600 million on suppliers from underrepresented communities”;11 (4) “As of the end of 2023, [Netflix has] invested over $41 million globally in the Netflix Fund for Creative Equity, which helps increase training and opportunities within the entertainment industry for people from historically underrepresented groups.”12

With 10,000-plus employees,13 Netflix likely has thousands of employees, job applicants, and other stakeholders who are potentially victims of this type of discrimination. If even only a fraction of them file suit, and only some of those prove successful, the cost to Netflix could reach billions of dollars.