Wiping the (Diverse Candidate) Slate Clean?

By Fiona Ong - Shawe Rosenthal LLP

March 8, 2024

In the aftermath of the Supreme Court’s decision rejecting affirmative action in college admissions, there have been well-publicized attacks on corporate diversity initiatives. And now the conservative advocacy group, America First Legal Foundation, is tackling the NFL and its Rooney Rule – a development of concern to employers who use diverse candidate slates in their hiring process.

Intended to address the lack of diversity in NFL teams’ top coaching and leadership positions, the Rooney Rule requires teams to interview at least 2 external minority candidates for head coaching and general manager positions, 1 external minority candidate for coordinator positions, and 1 minority and/or female candidate for senior level positions. The Rule was amended to give teams compensatory draft picks for the development and loss of minority executives or coaches. Although the effectiveness of the Rule has been hotly debated since its adoption in 2003, the diverse slate concept has been adopted by a number of corporations. The legal industry has its own version of the Rule, called the Mansfield Rule. In order to achieve Mansfield Rule certification, firms must consider slates for leadership roles that include at least 30% historically underrepresented lawyers (e.g. race, sex, LGBTQ+, disability).

Last month, America First sent a letter to the Equal Employment Opportunity Commission, arguing that diverse candidate slate requirements, like the Rooney Rule, violate Title VII’s prohibition on discrimination on the basis of certain protected characteristics including race and sex. (As I explained in a prior blog post, Hey CEOs – Be Careful With Those Diversity Initiatives!, under Title VII, employers are prohibited from exhibiting a “discriminatory preference for any group, minority or majority” – and this includes White and male employees as well as minorities and females). In response, the NFL has publicly asserted that its Rooney Rule (and other initiatives) is compliant with the law. But is it?

In order to establish a discrimination claim under Title VII, an employee must show, among other things, that they suffered some “adverse employment action.” Traditionally, courts have interpreted that to mean some “ultimate employment decision” (typically involving a direct economic impact, such as a failure to hire, a lack of promotion or a termination), and employers have relied on this principle to support the legality of diverse candidate slates. After all, selection or non-selection for a candidate slate is not an ultimate employment decision.

However, several federal courts have recently found that adverse employment actions are not limited to “ultimate” actions, but also include discrimination in lesser actions, including those impacting the terms, conditions and privileges of employment (as we explained in our August 2023 E-Update). And the Supreme Court agreed to take up this question in the case of Muldrow v. City of St. Louis – a decision is pending, with many commentators expecting the Supreme Court to expand Title VII’s coverage beyond those “ultimate” actions.

As to what that might mean for diverse candidate slate policies, shortly after the Supreme Court’s affirmative action decision, EEOC Commissioner Andrea Lucas wrote an article in which she cautioned that “increasingly popular race-conscious corporate initiatives,” including “selecting interviewees partially due to diverse candidate slate policies,” might be found to violate Title VII if the Supreme Court extends coverage of the law to employment actions other than “ultimate” ones.

So, if there is a required percentage or quota for the number of diverse candidates that must appear on a slate (and particularly, if the size of the slate is capped), that could potentially be problematic, especially if there is no actual deficit in the numbers of diverse candidates for a particular role. As we have repeatedly reiterated, including in the blog post referenced above, employers should be making employment decisions – and in light of changing standards, not just “ultimate” decisions – based only on an employee’s job-related qualifications, even in the context of DEI initiatives. And, again, there are ways to increase the diversity of an applicant pool – but it cannot be done at the expense of White and/or male candidates. Moreover, managers should not be incentivized or rewarded for hitting numerical diverse candidate slate or hiring targets, as that may encourage them to make illegal race- or sex-based decisions.

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