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Opponents of workplace diversity programs are increasingly using parts of the Civil Rights Act of 1866 to challenge equity policies as well as funding for minority-owned businesses .
Section 1981 of the Act was originally intended to protect formerly enslaved people, especially black people, from economic exclusion. However, the American Equal Rights Alliance, a group run by Edward Blum, a conservative activist who successfully challenged affirmative action in higher education, is currently investing in companies owned by a venture capital fund called the Fearless Fund. It cites a section that explores By women of color. A federal appeals court has temporarily blocked funding for the Fearless Fund’s grant program as the case progresses.
Conservative activists have used the 1981 Clause to sue other companies and organizations, including insurance company Progressive and pharmaceutical giant Pfizer. The case is being closely watched as battles over racial considerations move into the workplace following the U.S. Supreme Court’s June ruling ending affirmative action in college admissions.
The 1981 law was used to prove reverse discrimination long before the latest affirmative action ruling, but Fearless Fund’s general counsel and chairman and chief executive officer of the Global Black Economic Forum “The 1981 provisions are now being used in a coordinated manner,” said Alphonso David, CEO of the company. It was something we had never seen before. ”
Here’s what’s happening and what the possible impacts are:
What is Section 1981?
The Civil Rights Act of 1866 is a federal law that prohibits discrimination on the basis of race, color, or ethnicity when entering into and enforcing contracts. Section 1981 specifically grants all individuals within U.S. jurisdictions the same rights and benefits with respect to contractual relationships as “enjoyed by white nationals.”
However, the Supreme Court’s 1976 decision in McDonald v. Santa Fe Trail Transportation expanded these protections, prohibiting racial discrimination in civilian employment against whites and people of color in Section 1981. .
“This is a very clever strategy,” said Randolph McLaughlin, a civil rights lawyer and Pace University law professor, referring to the use of the 1866 law. “They’re trying to overturn civil rights laws.”
The standard of evidence for the 1981 section is high. That is because of the Supreme Court’s 2020 decision in Comcast v. National African American Owned Media Association, which found that plaintiffs who allege racial discrimination under the same section were denied a contract opportunity based on their race. This is because it stipulates that there is a responsibility to show that the cause is the cause. It is the opposite of just a motivating factor.
Why not rely on Title VII instead?
Title VII of the Civil Rights Act of 1964 protects employees and job applicants from employment discrimination based on race, color, religion, sex, or national origin. If a plaintiff chooses to sue under Title VII, they must file a complaint with the Equal Employment Opportunity Commission. This process can take up to 180 days. The plaintiff can then file a lawsuit. Choosing the 1981 route is much faster.
Legal experts say Section 1981 is broader than Title VII, which generally applies to employers with 15 or more employees. Additionally, under Title VII, plaintiffs can only recover up to $300,000 in compensatory and punitive damages. Section 1981 has no limitations.
Title VII has a lower standard of proof than Section 1981. Plaintiffs need only prove that race was a motivating factor rather than the central cause.
Why is the lawsuit against the Fearless Fund potentially important?
The American Equal Rights Alliance says in a lawsuit that the foundation’s Fearless Stravers Grant Contest, which awards $20,000 to black women who own businesses, excludes some people from the program because of their race. It claims that doing so violates Article 1981 and is seeking relief.
Fearless Fund lawyers argued in court filings that the grants were donations, not contracts, and were protected by the First Amendment.
David, general counsel for the Fearless Fund, argues that if this type of grant can be considered a contract, then grants issued in many other forms and situations can also be considered contracts. states that it can be done.
“Think about any foundation that makes grants,” David said. “They’re issuing grants to people from different demographic groups. They’re only issuing grants to women. They’re issuing grants to earthquake survivors. It’s all about contracts. mosquito?”
Angela Reddock Wright, a Los Angeles-based employment and Title IX attorney and mediator, believes there is a “very good chance” the case will reach the Supreme Court.
“Ideally, the court would decline to hear this matter on the basis that section 1981 is not intended to deal with such matters, but this court operates under different rules and standards. “There seems to be,” she said.
What impact have similar lawsuits had?
Some companies have already changed the criteria for their diversity fellowship programs.
Law firms Morrison Foerster and Perkins Coy opened their diversity fellowship programs to all applicants of all races in October, but the firms said they had been preparing changes even before Mr. Bloom filed his lawsuit. did. Then he dropped them. Until now, programs for first-year law students have targeted students from historically underrepresented groups.
The Morrison-Foerster Fellowship Program is currently open to students who have demonstrated a commitment to equity and diversity. Perkins Coie announced that it has opened its fellowship program to all applicants regardless of race, gender, or LGBTQ identity. Perkins Coie said in a statement that the changes come as part of an update to its diversity and inclusion policies following the Supreme Court’s ruling on affirmative action.
Last February, Pfizer eliminated race-based eligibility requirements for a fellowship program designed for black, Latino, and Native American college students. A judge has dismissed a lawsuit brought by Do No Harm, a conservative nonprofit group that claims Pfizer’s program violates Section 1981, but Do No Harm is appealing the ruling. are doing.
“What works in[companies’]favor is lowering their profile,” said George Ruthergren, a distinguished law professor at the University of Virginia. “This means that they are not explicitly considering race when making these decisions. Look to other conditions and requirements that may achieve the same objective.”
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AP Business Writer Hallelujah Hadero in New York contributed to this report.
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