The Pulse: Appeals Court Blocks Fearless Fund from Awarding Grants to Black Women


On June 3, A U.S. federal court of appeals panel suspended the Fearless Fund’s grant program for Black women business owners. While this is an unfortunate setback for efforts to advance greater economic equity in the U.S., we believe the case for business diversity remains strong. Read more about this decision and other DEI news, court cases, and developments in this month’s edition of the Pulse.

Picture of man in a blue suit holding a table that has DEI projecting from it.

DEI In the News

DEI metrics in executive compensation
Harvard Law School Forum on Corporate Governance, June 27

Utah higher ed. commissioner didn’t force schools to close cultural centers now — but said it’ll be ‘an inevitability’
The Salt Lake Tribune, June 27

DEI programs toppled amid a surge of conservative lawsuits
The Washington Post, June 27

Anti-DEI law forces closure of University of Utah LGBT center
The Guardian, June 25

These 2 Utah universities are eliminating all cultural centers — going beyond the state’s anti-DEI requirements
The Salt Lake Tribune, June 25

DEI attacks betray professionals striving for workplace fairness
Bloomberg Law, June 25

Tennessee employers stay committed to diversity, equity and inclusion despite the pushback
The Tennessean, June 25

Corporate women’s gains fall victim to anti-woke backlash
Bloomberg, June 24

Opinion: Harvard’s backtracking on DEI highlights a bigger problem
CNN, June 21

Small and mid-sized firms can effectively deploy DEI initiatives
Bloomberg Law, June 21

Rescuing diversity from the DEI backlash
Financial Times, June 20

Banks, law and consulting firms are watering down their diversity recruiting programs
Wall Street Journal, June 20

Companies are touting women in the C-suite – but their ranks are falling
BBC, June 20

Has the DEI backlash come for publishing?
The Atlantic, June 19

6 in 10 Americans support DEI in the workplace
Inc., June 18

Most Americans approve of DEI, according to Post-Ipsos poll
The Washington Post, June 18

Most Americans favor DEI programs: Survey
The Hill, June 18

131 college scholarships put on hold or modified due to Texas DEI ban, documents show
Dallas Morning News, June 17

Research: the most common DEI practices actually undermine diversity
Harvard Business Review, June 14

Don’t be afraid to experiment—and even fail—to make DEI advances
Bloomberg Law, June 14

Backing diversity as First Amendment expression comes with risks
Bloomberg Law, June 13

Corporate DEI isn’t dead. it’s an existential moment for change
Bloomberg Law, June 13

Republicans introduce measure banning DEI in federal government
The Hill, June 12

After DEI assaults, conservative opponents attack corporate ESG policies
INC., June 12

Opinion: I’ve worked in DEI for a decade, it won’t survive beyond 2025
Fast Company, June 12

Diversity has no boundaries: The short-lived discrimination lawsuit against NYU Law Review
Lexology, June 11

New paradigm can shift DEI from box-checking to mindset-building
Bloomberg Law, June 11

Drake University expands DEI programs as public universities shrink theirs
Des Moine Register, June 11

Utah wants the public to report violations of new anti-DEI law
Salt Lake Tribune, June 10

Opinion | Don’t blame the Supreme Court for universities’ stunning reversal on DEI
The Washington Post, June 10

How DEI rollbacks at colleges and universities set back learning
The Conversation, June 10

Workplace DEI breaks down barriers with flexible benchmarks
Bloomberg Law, June 10

How GCs should prepare the board to decide DEI’s next phase
Bloomberg Law, June 10

Corporate diversity programs could be headed toward the Supreme Court
Axios, June 6

Is this the end for mandatory D.E.I. statements?
The New York Times, June 6

State AGs warn bar that its law school DEI rules are illegal
Bloomberg Law, June 5

Conservative duo wants to take down DEI one bias claim at a time
Bloomberg Law, June 5

Appeals court blocks Fearless Fund from awarding grants to Black women
The Washington Post, June 3

A grant program for Black women business owners is discriminatory, appeals court rules
AP News, June 3

Companies quietly ramp up DEI efforts amid political turmoil
Bloomberg Law, June 3

The vast majority of C-suite leaders say they’re doubling down on DEI, but they’re still fighting an uphill battle
Fortune, June 3

Research: why companies should disclose their lack of progress on DEI
Harvard Business Review, June 3

Business leaders aren’t abandoning DEI (even if they’re staying quiet)
Inc., June 3

Are DEI programs really the problem?
The Hill, June 1

DEI In the Courts

Do No Harm v. Gianforte
On March 12, Do No Harm filed a complaint on behalf of a white female dermatologist in Montana, alleging that a Montana law requiring the governor to “take positive action to attain gender balance and proportional representation of minorities resident in Montana to the greatest extent possible” when making appointments to the Medical Board violates the Equal Protection Clause of the Fourteenth Amendment. The complaint further alleges that since the ten filled seats are currently held by six women and four men, Montana law requires that the remaining two seats be filled by men, which would preclude the plaintiff from holding the seat.

  • On June 7, Governor Gianforte moved to dismiss the amended complaint for lack of jurisdiction, arguing that the case is not ripe, and members A, B, C, and D lack standing because they do not allege a concrete, actual, or imminent harm. Governor Gianforte contended that the members have not applied for the open seats and some appear currently ineligible and that compliance with the statute at issue is “aspirational” rather than mandatory. The Governor emphasized that his “sole priority is highly qualified appointees” because he “opposes the ideological tenets of [DEI], quotas, and affirmative action.”

Arsenault v. HP Inc.
On May 29, a white former employee of HP Inc. filed a lawsuit alleging that his termination violated Title VII and 42 U.S.C. § 1981. The complaint claims that during a review meeting in August 2022, the plaintiff agreed with another team member’s opinion that the company was spending too much time on DEI (Diversity, Equity, and Inclusion) practices. As a result, his managers accused him of racism. Additionally, the complaint alleges that the plaintiff was verbally abused by a co-worker, but the company took no action after he reported the incident. The plaintiff was terminated in March 2023, with the company citing a workforce reduction as the reason. However, the complaint argues that no one else in the plaintiff’s department was laid off, suggesting that the termination was a pretext.

Allan Kingsley Wood v. Red Hat, Inc.
On May 8, America First filed a lawsuit on Wood’s behalf after first filing a complaint with the U.S. Equal Employment Opportunity Commission. Wood, a former senior director at enterprise software company Red Hat, alleged he was fired in violation of Title VII of the Civil Rights Act for being white and male after he spoke out against the company’s push to hire based on race and gender. The plaintiff “felt that he was being targeted, marked, and labeled as an undesirable employee for voicing his opinions in opposition to Red Hat’s DEI policies,” attorneys for the plaintiff said in their complaint. The plaintiff was fired along with 21 additional people, all of whom (with one exception) were white and male, after company leadership announced a goal to reach 30% female and 30% minority workers by 2028, according to the complaint.

  • The defendant is required to respond to the complaint by July 29.

DiBenedetto v. AT&T Servs.
On Nov. 2, 2021, the plaintiff, a white male former executive, brought claims against AT&T under Title VII, Section 1981, and the Age Discrimination in Employment Act (ADEA), alleging that he was wrongfully terminated due to his race, gender, and age.

  • On May 20, the plaintiff stipulated and agreed to dismiss with prejudice his race and gender discrimination claims. The plaintiff’s ADEA claim remains.

Chu, et al. v. Rosa
On Jan. 17, a coalition of education groups sued Dr. Betty A. Rosa, the Education Commissioner of New York, alleging that the state’s free summer program, the Science and Technology Entry Program (STEP), discriminates based on race and ethnicity, violating the Equal Protection Clause of the Fourteenth Amendment. STEP allows Black, Hispanic, Native American, and Alaskan Native students to apply regardless of family income, while other students, including Asian and white students, must prove they are “economically disadvantaged.” On April 19, Dr. Rosa moved to dismiss the amended complaint, arguing that the organizational plaintiffs and the named plaintiff, a parent, did not suffer any personal injury and lacked the standing to sue for potential STEP applicants’ rights.

  • On May 24, the plaintiffs opposed the motion to dismiss, contending that they do not need to undertake “futile actions” to apply for the STEP program to establish standing. They argued that their injury is the “inability to compete on an equal footing,” not necessarily the failure to secure a spot in the program.

Alexandre v., Inc
White, Asian, and Native Hawaiian entrepreneurs, representing a potential group of previous and prospective applicants to Amazon’s “delivery service partner” (DSP) program, contested a DEI initiative that offers $10,000 grants to eligible delivery service providers who identify as “Black, Latinx, and Native American entrepreneurs.” The plaintiffs have accused Amazon of breaching California state civil rights statutes that forbid discrimination. The complaint alleged the opportunity for this stipend violated 42 U.S.C. § 1981 by discriminating against white and Asian Americans. The America First Legal Foundation, which filed suit on behalf of the plaintiff, included this action on its website as one of its “featured actions” in the “DEI” space. For her part, the white plaintiff did not complete an application for the DSP program after allegedly learning that she would not be eligible for the stipend but alleged that she would immediately apply for it once Amazon revoked its alleged racially discriminatory policy. On Dec. 6, 2023, Amazon filed a motion to dismiss the case.

  • On May 23, Judge Michael M. Anello granted Amazon’s motion to dismiss a lawsuit against the company. The court ruled that the plaintiffs lacked standing to sue because they were “unwilling to apply for DSP contracts,” making their claimed injury “merely hypothetical and conjectural.” Additionally, the court dismissed all three of the plaintiffs’ claims on their merits. The plaintiffs’ claims under Section 1981 were dismissed because they did not counter Amazon’s argument that they suffered no loss of contractual interest due to their unwillingness to apply, effectively abandoning their claims. The court also dismissed both of the plaintiffs’ claims under the Unruh Civil Rights Act, stating that the Act does not govern relationships between two businesses.

American Alliance for Equal Rights v. Ivey
In February 2024, the American Alliance for Equal Rights (AAER) filed a lawsuit against Alabama Governor Kay Ivey over a state law requiring at least two minority members on the Alabama Real Estate Appraisers Board (AREAB). The board has nine seats, including an unfilled “at-large” seat for a member without real estate experience. With only one minority member on the board, AAER claims the law will mandate filling the open seat with a minority member. AAER says one of its members applied for the seat but was rejected solely because of race, violating the Fourteenth Amendment’s Equal Protection Clause.

  •  On May 20, AAER moved for judgment on the pleadings, arguing that the racial requirement for appointments to the board is unconstitutional and there are no unresolved questions of material fact. Governor Ivey’s and AAREB’s responses are due on June 10.

Other DEI Developments

June 13: Sens. Bill Cassiday (R-LA) and JD Vance (R-OH) introduced the Dismantle DEI Act, which would rescind executive orders, terminate chief diversity offers, bar critical race theory training and mandatory DEI pledges, and revoke DEI funding for federal agencies including the Defense Department and the Department of Homeland Security. It would also bar awarding federal contracts and grants to businesses or organizations with DEI policies.

June 3: The Eleventh Circuit Court ruled 2-1 in favor of AAER, granting them a preliminary injunction in the case against Fearless Fund. Judges Kevin Newsom and Robert Luck decided that AAER has the legal standing to sue on behalf of anonymous members. They also determined that preliminary injunctive relief is warranted because Fearless Fund’s program is likely to violate Section 1981 and isn’t protected by the First Amendment. This decision reverses the lower court’s denial of the injunction and instructs the district court to issue a preliminary injunction to stop Fearless Fund from closing its contest.

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