Attorney General Jonathan Skrmetti is leading a coalition warning the nation’s largest companies — many of which have diversity and equity programs — they could face legal action for using race-based policies.
A Thursday letter from Skrmetti and 12 other attorneys general put Fortune 100 companies on notice they could be hit with legal action for violating the U.S. Supreme Court’s ruling in Students for Fair Admissions v. President & Fellows of Harvard College, which put an end to using race as a basis for admitting students to college. The attorneys general are targeting hiring and contracting too.
“As the Supreme Court recently emphasized, both our Constitution and our civil rights laws guarantee every American the right to be free from racial discrimination,” Skrmetti said in a release. “The Court’s reasoning means that companies, no matter their motivation, cannot treat people differently based on the color of their skin. Corporate America continues to have many avenues to help disadvantaged people and communities of all races without resorting to crude racial line-drawing.”
The letter compares policies within many Fortune 100 companies to slavery and racial segregation.
“In an inversion of the odious discriminatory practices of the distant past, today’s major companies adopt explicitly race-based initiatives which are similarly illegal,” the letter says, pointing toward “racial quotas” in hiring, recruiting, retention, promotion and advancement.
The letter immediately reminds companies they must refrain from “discriminating on the basis of race, whether under the label of ‘diversity, equity and inclusion’ or otherwise. Treating people differently because of the color of their skin, even for benign purposes, is unlawful and wrong.”
The Supreme Court ruling struck down race-based admissions policies at Harvard College and the University of North Carolina.
The letter says the court’s decision “reinforced the principle that all racial discrimination, no matter the motivation, is insidious and unlawful,” which means eliminating “all of it.”
The attorneys general asked the companies to comply with race-neutral principles in their employment and hiring practices.
The letter further says: “If your company previously resorted to racial preferences or naked quotas to offset its bigotry, that discriminatory path is now definitively closed. Your company must overcome its underlying bias and treat all employees, all applicants, and all contractors equally, without regard for race.”
The letter, addressed “Dear Fortune 100 CEOs,” targets JPMorgan and Goldman Sachs, as well as Airbnb, Apple, Cisco, Facebook, Google, Intel, Lyft, Microsoft, Netflix, Paypal, Snapchat, TikTok, Uber and others.
Among the nation’s top 100 companies doing business in Tennessee are FedEx, HCA Healthcare and Ford Motor Company, which each have ongoing diversity and inclusion corporate initiatives.
A letter from a coalition of states attorneys general, including Tennessee AG Jonathan Skrmetti, compares compares diversity policies within many Fortune 100 companies to slavery and racial segregation.
“Diversity breeds innovation and the companies that attract the most talented and diverse workforce will succeed in our rapidly changing world,” Ford says on its “Equity, Diversity and Inclusion” section of its website devoted to job-seekers. Ford is in the process of building a $5.6 billion electric truck plant in west Tennessee that is expected to employ more than 6,000 workers. The state gave Ford nearly $1 billion in incentives to come to Tennessee.
Memphis-based FedEx, Tennessee’s biggest company, says on its diversity and inclusion webpage that research demonstrates the benefits to businesses for making diversity a priority. “But there’s another, far more important reason why we embrace diversity and inclusion: It’s simply the right thing to do,” the company says.
In Nashville, HCA Healthcare issues annual reports on its diversity and inclusion initiatives that span health equity in patient care, employees and contractors.
“We are committed to strengthening the diversity of our talent pool and supporting the advancement of people of color and women in leadership,” its Dec. 2022 annual report detailing the progress of its efforts. “As of July 2022, people of color represent 39% of new hires into management and supervision roles at HCA Healthcare. Additionally, we continue to diversify our class of emerging leaders for the Executive Residency Program, with 40% of our 2022 cohort comprised of people of color and 40% comprised of women.”
Yet the letter from attorneys general quotes the Supreme Court’s rejection of racial quotas and preferences, saying the court wrote in 2007 in Parents Involved in Community Schools v. Seattle School District: “[Racial] classifications promote ‘notions of racial inferiority and lead to a politics of racial hostility, ‘reinforce the belief, held by too many for too much of our history, that individuals should be judged by the color of their skin,’ and ‘endorse race-based reasoning and the conception of a Nation divided into racial blocs, thus contributing to an escalation of racial hostility and conflict.”
There is an appalling lack of representation in corporate America. . . If Tennessee’s Republican attorney succeeds in bullying companies into ending their programs to hire and work with Black Americans, the consequences will be devastating.
– Sen. London Lamar, D-Memphis
Sections prohibiting racial discrimination in employment are taken from the Civil Rights Act of 1964 to make their attorneys general legal argument.
State Rep. John Ray Clemmons of Nashville, chairman of the House Democratic Caucus, said Thursday the letter marks a clear shift in the Republican Party away from the moderate politics of the late U.S. Sen. Howard Baker.
“Today’s GOP takes every possible opportunity to tell private corporations how to run their business and encroach into private and personal affairs,” Clemmons said in a statement.
Clemmons added that Skrmetti’s conduct makes him out “to be little more than the radical right’s errand boy.”
Democratic Sen. London Lamar of Memphis also criticized Skrmetti for trying to “undermine economic opportunity” for Black workers and business owners, calling it an abuse of power.
“There is an appalling lack of representation in corporate America. For instance, there are only eight Black CEOs leading Fortune 500 companies — and that’s a record high number,” said Lamar, chairman of the Senate Democratic Caucus. “If Tennessee’s Republican attorney succeeds in bullying companies into ending their programs to hire and work with Black Americans, the consequences will be devastating.”
Lt. Gov. Randy McNally backed the AG’s position Thursday.
Adam Kleinheider, spokesman for McNally said: ““While Lt. Governor McNally believes diversity is a strength and that all businesses should strive to be inclusive when possible, he also believes hiring decisions should be merit-based and devoid of racial discrimination in any way. He supports the ruling and General Skrmetti’s letter.”
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