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 Diversity, Equity and Inclusion (DEI) programs was called into question2 and thirteen Attorneys General warned that SFFA implicated corporate DEI 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 also 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.
Since SFFA, a number of DEI-related lawsuits have been filed. Starbucks was successfully sued for discrimination by an employee for $25.6 million,6 and the risk of being sued for such discrimination is rising.7
Sensibly, many major companies have responded by rolling back their DEI commitments and laying off DEI departments due to the risks DEI creates of illegal discrimination.8 Alphabet and Meta cut DEI staff and DEI-related investments;9 and Microsoft and Zoom laid off their entire DEI teams.10 Since Muldrow, John Deere publicly halted DEI-related policies11 after Tractor Supply explicitly stated that it “eliminate[d] DEI roles and retire[d] our current DEI goals,”12 Lowe’s and Ford ended their participation in the Human Rights Campaign’s Corporate Equality (CEI),13 Harley Davidson ceased its DEI efforts,14 Jack Daniels ended both its DEI efforts and CEI participation,15 and Boeing got rid of its DEI department.16
DEI poses risks to companies and their shareholders, including the risk that adopting DEI policies that implement illegal discrimination will constitute a breach of fiduciary duties.
Despite these obvious risks, the SFFA and Muldrow decisions, and the wave of corporate DEI retreats, Bristol Myers Squibb still has a DEI program, which includes (1) race-based employee resource groups,17 (2) collaboration with the controversial Human Rights Campaign,18 (3) race-based workforce representation goals,19 (4) supplier diversity commitments,20 and (5) “affirmative action” policies.21
With over 30,000 employees,22 BMS likely has thousands of employees 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 BMS could reach billions of dollars.