September 1, 2003

Avoiding Lawsuits is a service of the employment law training and consulting firm of Counsel Consulting Group LLC and the law firm of Powell, Trachtman, Logan, Carrle & Lombardo, P.C.

IS THERE ANYTHING WRONG WITH FAVORING MINORITIES TO PROMOTE
DIVERSITY IN YOUR WORKPLACE?

The Supreme Court Says Universities Can Do It If They Use Carefully-Crafted Methods ...
Can Businesses Do the Same Thing?

In 1963, on the steps of the Lincoln Memorial, Martin Luther King dreamed that "my four children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character."

Last June, in a context that could have been scarcely imagined 40 years ago, the Supreme Court was called upon to decide whether, notwithstanding Dr. King's dream, the University of Michigan law school could judge applicants by the color of their skin, albeit to favor, and not prejudice the interests of minorities.

The decision: the Supreme Court recognized that promoting diversity on campus had genuine, practical benefits, and within certain tightly-drawn limits, it permitted the law school to utilize minority status as a factor in making admissions decisions. In short, our bedrock social principle of a race-blind society could yield to other social policies - in this case, the promotion of diversity.

Does the same logic apply to the workplace?

What If Your Business Really Needs Minority Workers?

Consider this... You have two, equally-qualified applicants for a position with your company. One is a minority. You know that, unintentionally, your work force has few minorities and to avoid the financial and PR fallout an accusation of racial prejudice could cause, you'd like to remedy the imbalance. You hire the minority applicant for that reason.

Or suppose your company wants to start doing business with Latin American companies. You believe that hiring some Hispanic management-level employees will make you a more attractive business partner, and those employees will be able to more effectively deal with their Latin American counterparts. So you instruct your HR department to consider Hispanic applicants more favorably than white applicants for these real-world, practical reasons.

In these typical scenarios, you would not be favoring a minority applicant because of a preference for a particular race or nationality, but because of some practical, tangible business purpose - avoiding accusations of bias, or fostering customer relations. It seems that this should be permissible and, in fact, this kind of needs-based, practical analysis was one of the important factors considered by the Supreme Court when it permitted the University of Michigan law school to consider minority status as an admissions criterion. Sixty-five major corporations having annual revenues in excess of a trillion dollars filed a brief extolling "the importance of racial, ethnic and other diversity in our leading institutions of higher education" in the preparation of students for business life in a global economy. The Supreme Court bought the argument, writing, "American businesses have made clear that the skills needed in today's increasingly global marketplace can only be developed through exposure to widely diverse people, cultures, ideas, and viewpoints."

The university admissions process is plainly analogous to the workplace admissions process, isn't it? Doesn't the same logic apply in both places?

Many companies apparently think so. In our practice, we have noticed that many business owners and executives have interpreted the mass media reporting of the University of Michigan decision, and the entire modern ethos favoring diversity, as an endorsement of hiring practices intended to increase diversity in the workplace. Some have even gone so far as to direct their HR departments to add specific numbers of minorities to specific departments or management levels, and to brag about the accomplishment as if it were a PR coup worthy of front page treatment.

So What's The Problem?

We need to state this as plainly as we can: it remains unlawful for employers to hire, promote, fire or make other employment decisions based on race, ethnicity, religion, and similar factors .

Hiring decisions based on well-motivated efforts to assist minorities or increase diversity will likely constitute "reverse discrimination," and will lead to the same types of lawsuits and liabilities as are brought against employers who are accused of ill-motivated discrimination. With arcane exceptions beyond the scope of this article, even government-mandated "affirmative action" programs do not permit, let alone mandate, hiring employees on the basis of minority status.

Then How Do You Increase Diversity?

This reality raises many issues for employers who, for practical business reasons, truly desire to increase the extent of the diversity in their companies. For instance:

•  Is there a way to establish "increasing diversity" as a business goal without running the risk of reverse discrimination suits?

•  Can you reward managers who increase diversity in their departments?

•  Can you implement special training, mentoring or internship programs geared toward minorities?

•  How can you respond to foreign customers who make plain that their relationship with your company will depend on the extent to which you increase the percentage of management employees of that customer's nationality?

There are some things you can do, but they have to be planned and monitored with extreme care with the help of professionals who have been there and done that. A sampling:

•  Except in rare circumstances, you cannot set numerical or percentage targets for minority hiring, promotion, training, and so on, but you can implement a voluntary affirmative action plan geared to increase the number of minority applicants who will seek a position with your company. However - and it is a big however -- the Supreme Court has defined certain criteria that must be satisfied in the process, and the implementation of such a plan requires a very careful legal analysis;

•  If you head down the road of consciously attempting to increase workplace diversity, you will need a documentation strategy that puts you in a position where you can prove you did the right thing in the event of a legal challenge. The stakes in this arena are too high to leave this to chance;

•  You cannot begin a compliant diversity program without first negating any prior, lurking violations. Did anyone in your company previously issue memos or emails directing that certain numbers of minorities be hired, or that certain positions be filled with minority applicants? Are there potentially problematic manuals, handbooks, promotional materials and similar documents in the file cabinets or on back-up computer files? Get rid of the smoking guns, and establish, implement and consistently enforce clear policies that will not breed lawsuits.

It is somewhat ironic that while the creation of workplace diversity remains a favored goal in our society, the easiest and quickest ways to create that diversity remain overtly unlawful. The upshot: you can do what's right, so long as you do it the right way. Let us know if we can help.

Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.

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