Saturday, February 20, 2021

Dreher: "How is Wells Fargo going to double black leadership in five years without actively hiring and firing people on the basis of race?"

I found the following in my inbox this morning: Facebook, Twitter, United Airlines and other large companies pledge to boost numbers of diverse leaders ("Nowhere in corporate America have I seen these metrics or an initiative with these types of metrics," said SVLG CEO Ahmad Thomas in an interview with MarketWatch before the announcement of the initiative.).

That reminded me of some commentary Rod Dreher posted last year in response to similar initiatives by Microsoft and Well Fargo (here):

Nadella didn’t say that Microsoft will attempt to do that; he said that Microsoft will do that. You can only double the number of blacks at the company through discriminatory hiring and firing. If you are white, Asian, or Hispanic, and work at Microsoft, you will not have the same chance at promotion, or perhaps you will even have to be laid off to make room for black managers…. How is Wells Fargo going to double black leadership in five years without actively hiring and firing people on the basis of race? ....

According to theorists of “antiracism” like Ibram X. Kendi, any time you see fewer blacks within an institution …, that is conclusive evidence of racism. Racial discrimination is the only explanation. It could not possibly be that, for example, fewer blacks chose to study finance (Wells Fargo), tech (Microsoft) or in related fields that would have brought them into the workplace at those particular companies. Only racism explains it…. This is what Microsoft apparently believes. This is what Wells Fargo apparently believes. This is what they are committed to doing: discriminating against non-black employees to fit this ideological idea of antiracism.

Relatedly, Ed Whelan had the following to say about Coca-Cola's new diversity guidelines for outside counsel (here):

Title VII of the Civil Rights Act of 1964 broadly prohibits employers from discriminating on the basis of race, including in assigning work. But that’s exactly what Coca-Cola would have law firms do. It’s often thought that the Supreme Court’s anti-textual ruling in United Steelworkers v. Weber (1979) gives a green light to racial preferences that favor blacks. But the Court’s actual holding is much narrower than that …. While declining to “define in detail the line of demarcation between permissible and impermissible affirmative action plans,” the Court emphasized that the plan at issue was “a temporary measure” and was “not intended to maintain racial balance, but simply to eliminate a manifest racial imbalance” resulting from the systematic exclusion of blacks from craft unions…. Far from adopting its guidelines as “a temporary measure” to “eliminate a manifest racial imbalance,” Coca-Cola contemplates that the guidelines will operate in perpetuity to achieve and “maintain racial balance.” Indeed, the guidelines explicitly state that their “minimum commitments will “be adjusted over time as U.S. Census data evolves.” In short, there is little reason to think that the employment discrimination that Coca-Cola’s guidelines call for would fall within the Weber exception to Title VII.

Richard Epstein makes the further point (here) that if there is a known pipeline problem (i.e., based purely on the current number of Black attorneys, the quotas appear to require reaching further into the talent pool) then a breach of duty claim might also be possible: It is also worth asking whether a shareholder could succeed with a derivative legal action that held that the adoption of Coke’s decision to hire weaker minority workers was a breach of its fiduciary duty.

It is easy to find at least some of the foregoing analysis offensive and/or just plain wrong, but the question remains for discrimination law experts: In terms of surviving a motion to dismiss in a reverse-discrimination case, how much (if at all) do these corporate diversity commitments help plaintiffs?  In terms of Epstein's fiduciary duty point, I find it very difficult to imagine a set of facts that would preclude management from claiming a pro-corporate cost-benefit analysis sufficient to dismiss a fiduciary duty claim.  You'd basically need "smoking gun" evidence of decision-makers having a Henry Ford or Tim Cook moment to even have a chance of avoiding that as a plaintiff (i.e., some version of "we have reason to believe this might destroy shareholder value but we don't care").

https://lawprofessors.typepad.com/business_law/2021/02/dreher-how-is-wells-fargo-going-to-double-black-leadership-in-five-years-without-actively-hiring-and.html

Stefan J. Padfield | Permalink

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