Eleventh Circuit Holds that Grant Program for Black Women Business Owners is Discriminatory

The case is American Alliance for Equal Rights v. Fearless Fund Management (11th Cir. June 3, 2024)

NPR, Grant Program for Black Women Business Owners is Discriminatory, Appeals Court Rules

A U.S. federal court of appeals panel suspended a venture capital firm's grant program for Black women business owners, ruling that a conservative group is likely to prevail in its lawsuit claiming that the program is discriminatory.

The ruling against the Atlanta-based Fearless Fund is another victory for conservative groups waging a sprawling legal battle against corporate diversity programs that have targeted dozens of companies and government institutions.

The case against the Fearless Fund was brought last year by the American American Alliance for Equal Rights, a group led by Edward Blum, the conservative activist behind the Supreme Court case that ended affirmative action in college admissions.

Blum applauded the ruling, saying "programs that exclude certain individuals because of their race such as the ones the Fearless Fund has designed and implemented are unjust and polarizing."

Fearless Fund CEO and Founder Arian Simone said the ruling was "devastating" for the organizations and the women it has invested in.

"The message these judges sent today is that diversity in Corporate America, education, or anywhere else should not exist," she said in statement. "These judges bought what a small group of white men were selling."

Alphonso David, Fearless Fund's legal counsel who serves as president and CEO of The Global Black Economic Forum, said all options were being evaluated to continue fighting the lawsuit.

The legal effort to dismantle workplace diversity programs has suffered its share of setbacks as well, reflecting polarized opinions among liberal and conservative judges on the issue. Last week, for example, a federal district judge in Ohio dismissed a lawsuit against the insurance company Progressive and fintech platform Hello Alice challenging a program that offers grants to help Black-owned small businesses purchase commercial vehicles. Similar lawsuits have been dismissed against Amazon, Pfizer and Starbucks.

The case against the Fearless Fund has been closely watched by civil rights groups, philanthropic organizations, employment lawyers and the venture capital industry as a bellwether for how the courts are viewing programs intended to level the playing field for racial minorities and other groups that have historically faced discrimination in businesses and workplaces.