Sen. Cotton Warns Law Firms RE: DEI Programs; Dem. AGs Push Back Against “Intimidation”

Sen. Tom Cotton (R-AK) sent a letter to 51 law firms warning them and their clients over possible unlawful DEI practices in the wake of the Supreme Court’s Harvard decision. The letter follows a similar communication sent by Republican attorneys general to Fortune 100 companies last week. Like that letter, Cotton’s communication alleges that companies use illegal race-based hiring quotas. 

Sen. Cotton alleges that law firms, major corporations, and investment firms such as BlackRock have all encouraged and/or adopted DEI practices that may be unlawful. “In recent years, many major corporations have adopted race-based hiring quotas and benchmarks as part of their ‘Diversity, Equity, & Inclusion’ initiatives. This is often driven by investment firms like BlackRock that pressure companies to implement DEI hiring policies to satisfy their ‘Environmental, Social and Governance Mandates. These initiatives are both unpopular and unlawful.” The letter provides no evidence of the use of race-based hiring quotas or other potentially unlawful practices, nor of the unpopularity of DEI practices. 

The letter acknowledges that the Supreme Court’s decision in Harvard has no bearing on employer obligations under Title VII. Despite this, the letter claims the ruling puts employers on notice that their DEI practices are unlawful in the same manner that Harvard and UNC’s college admissions programs were. The letter warns law firms that “both you and those clients should take care to preserve relevant documents in anticipation of investigations and litigation.”

Democratic attorneys general say diversity efforts are legal. In response to the letter sent by Republican attorneys general, Democratic attorneys general from 20 states and the District of Columbia sent a letter to the CEOs of the largest 100 U.S. companies stating that corporate efforts to increase diversity are legal. The letter states that their colleagues issued a “baseless assertion that any attempts to address racial disparity are by their very nature unlawful” and that they will provide legal defense to companies if their diversity initiatives face challenges.

• The letter states that the Supreme Court’s Harvard decision did not change employer obligations under Title VII or other requirements.
  
  
• It also states that while it is illegal for employers to hire solely based on race, employers can identify and remedy problems that have led to racial disparities in the past, and identify barriers to advancement in the talent pipeline.

Outlook: The Democratic attorneys general letter reasserts that aspirational goals developed consistent with Title VII are still permissible, and indicates that the signatories will push back against attempts to narrow existing law. Senator Cotton’s letter, like that of the Republican attorneys general, seems more intended to make employers consider backing down on DEI initiatives and to encourage others to consider litigation against the same, while threatening Congressional oversight investigations.