Big Business Scales Back ‘Diversity’ Initiatives As Legal Pressure Mounts

Big Business Scales Back ‘Diversity’ Initiatives As Legal Pressure Mounts

Jake Smith on December 24, 2023

A number of major corporations and firms backtracked from Diversity, Equity and Inclusion (DEI) initiatives in 2023 amid heightened public criticism and threats of litigation.

Companies like BlackRock and JPMorgan Chase, as well as several law firms, previously instituted several DEI initiatives in their policies and hiring practices, according to a review of their public statements. Following legal accusations that these policies promote discrimination and unfair business practices, these companies backtracked from certain DEI policies in 2023

Law firm American Civil Rights Project (ACR) sent a letter to JPMorgan in May 2022 threatening legal action unless the banking company would “retract a host of illegal, discriminatory policies it has adopted.” ACR pointed to 10 separate examples of JPMorgan’s “illegal policies,” including the company’s Advancing Black Pathways program.

In February, roughly a year after receiving the letter from ACR, JPMorgan changed the language of that program to allow all freshmen and sophomore undergrad students “regardless of background” to apply, Reuters reported.

BlackRock, a global investment management firm, claims that DEI is a “business imperative,” and factors it into policy choices and operations. BlackRock also says it holds investors “accountable for progress in [DEI]” and sets “business-specific DEI goals.”

BlackRock has come under scrutiny for its DEI practices and is now facing a legal challenge after receiving a federal civil rights complaint in April from America First Legal. The complaint alleges that BlackRock “unlawfully limits, segregates and/or classifies applicants for employment based on race.”

AFL cited the BlackRock Founder’s Scholarship in the complaint, as it previously included language that it was “designed for” master’s students “who self-identify as Black or African American, Hispanic or Latino, Native American, LGBTQ+ or disabled.” Blackrock later updated the Founder’s Scholarship to remove reference to the program being tailored toward any certain background of people.

We are delighted to be recognized as the most diverse and inclusive workplace in the 2020 @Refinitiv Diversity & Inclusion Index. We celebrate diversity and are committed to creating an inclusive culture that benefits both our people and our business. https://t.co/mtN398nqV4 pic.twitter.com/tf8IquSE2f

— BlackRock (@BlackRock) September 16, 2020

“Baby steps toward compliance, toward the fair and equal treatment of all Americans, are certainly welcome,” Dan Morenoff, director of ACR, told Reuters.

We filed a federal civil rights complaint against BlackRock for engaging in the illegal and immoral practice of hiring based on skin color. Read about it here: https://t.co/V0sbMUOWWO

— America First Legal (@America1stLegal) June 12, 2023

Law firms have also faced legal threats for instituting certain DEI policies; Morrison and Foerster LLP previously held a diversity fellowship program catered to students “who are members of historically underrepresented groups in the legal industry,” according to an archive of the firm’s website. After facing legal threats from the American Alliance for Equal Rights (AAER) in August, Morrison and Foerster changed the applicant requirements of the fellowship to students with a “demonstrated commitment to diversity and inclusion in the legal profession;” AAER subsequently dropped the lawsuit in October, according to Bloomberg Law.

Gibson, Dunn and Crutcher changed applicant requirements for its diversity and inclusion scholarship from “students who have demonstrated resilience and excellence on their path toward a career in law” to students with “a history of meaningful contributions to the diversity efforts,” after facing legal threats from AAER in August, according to Bloomberg Law. Perkins Coie’s diversity fellowship program previously required applicants to hail from underrepresented communities, but that was changed to allow “all students” to apply regardless of background, having faced similar threats from AAER in August.

“Many law firms have been some of the most enthusiastic and outspoken entities to restrict opportunities to resources based on race and ethnicity,” Edward Blum, director of AAER, told The Washington Post.

Other major brands have received similar legal threats since 2021 and altered language or changed policies related to DEI initiatives at their respective companies, including Lowes, American Airlines, Kontoor Brands and Pizza Hut operator Yum!, according to a Reuters assessment. It is unclear whether these changes were made in direct response to legal challenges.

BlackRock, JPMorgan Chase, Lowes, American Airlines, Kontoor Brands, Pizza Hut operator Yum!, Morrison and Foerster LLP, Gibson, Dunn and Crutcher and Perkins Coie did not respond to a request for comment.