The Pulse: Minority Trade Groups Call on Fortune 500 CEOs to Stand Firm on DEI


As part of NMSDC’s ongoing efforts to lift up DEI and push back against the unfounded and cynical attacks on supplier diversity and other DEI programs, we are highlighting the latest DEI news, legal developments, and court filings.  This month’s edition of the Pulse is below.

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

DEI in the News

Alabama bill banning DEI measures for public entities passes Senate committee
Alabama Political Reporter Feb. 22

Workplace DEI isn’t dead. Here’s what’s next for DEI leaders.
Fast Company Feb. 22

Challenge to diversity quotas on boards of public companies scores legal victory in case against SEC
The New York Sun Feb. 20

“It all fell apart”: Fearless Fund founder on impact of DEI lawsuits
Inc. Magazine Feb. 20

Full US appeals court to reconsider Nasdaq board diversity rule
Reuters Feb. 20

Texas ban on university diversity efforts provides a glimpse of the future across GOP-led states
AP News Feb. 17

America First Legal files federal civil rights complaint against The Walt Disney Company for illegal race and sex discrimination America
First Legal Feb. 14

As DEI policies come under legal attack, philanthropic donors consider how to adapt
Associated Press Feb. 8

Minority trade groups are calling on Fortune 500 companies to stand firm on DEI commitments
Inc. Magazine Feb. 7

University of Utah professors speak out on anti-DEI bill’s “chilling effect”
The Salt Lake Tribune Feb. 7

DEI’s ‘Rooney Rule’ placed under legal microscope, on and off the field
Washington Post Feb. 6

DEI in the Courts

American Alliance for Equal Rights vs. Hidden Star
On Feb. 5, 2024, the American Alliance for Equal Rights (AAER) took legal action against Hidden Star. AAER filed a complaint and asked for a preliminary order to stop Hidden Star’s grant program called Galaxy of Stars, which gives $2,750 grants to “low-income and minority entrepreneurs.” AAER argues that this program discriminates based on race, violating Section 1981, because it seems to only give grants to certain ethnic groups or women. AAER’s claims against Hidden Star echo those in its suit against Fearless Fund.

  • Hidden Star has not yet responded to the complaint.

Hoffman v. Board Of Regents of the University of Wisconsin System
On Dec. 14, 2023, a white University of Wisconsin-Eau Claire employee sued the UW system, alleging that she was forced to resign from her role as interim director of the university’s Office of Multicultural Student Services due to her “race and color.”

  • Defendants’ response to the complaint is due on Feb. 26, 2024.

Valencia AG, LLC v. New York State Office of Cannabis Management et al
A cannabis company owned by white men sued the New York State Office of Cannabis Management for alleged discrimination. They claim that New York’s Cannabis Law and its regulations favor minority-owned and women-owned businesses. Specifically, they challenge regulations promoting “social & economic equity” applicants, arguing it violates the Equal Protection Clause and Section 1983.

  • On Feb. 7, 2024, Valencia AG filed a motion for a temporary restraining order and preliminary injunction. They seek to stop the defendants from implementing the regulations, charging reduced fees to “SEE” applicants, or preferentially granting their applications. o Valencia AG argues that race and sex-based discrimination is presumptively invalid. They claim they’ll suffer irreparable harm if they’re not granted relief promptly because early entrants receive benefits like customer loyalty. Defendants had to respond to the complaint by Feb. 21, 2024.

American Alliance for Equal Rights v. Fearless Fund Management, LLC
The American Alliance for Equal Rights (AAER) filed a lawsuit against Fearless Fund Management, a venture capital firm owned by Black women. Fearless Fund runs a charitable grant program giving $20,000 grants to Black female entrepreneurs. AAER claims this program violates Section 1981 and asked for a preliminary injunction.

  • On Jan. 31, 2024, the Eleventh Circuit heard oral arguments in AAER’s appeal of the district court’s denial of its motion for preliminary injunction in American Alliance for Equal Rights v. Fearless Fund Management, LLC, No. 23-13138 (11th Cir. 2023). During the argument, AAER asserted that Fearless Fund’s charitable grant program is a racially discriminatory contract subject to Section 1981. But Fearless Fund, represented by Gibson Dunn, asserted that the program is expressive speech protected by the First Amendment, such that the traditional Section 1981 analysis does not apply. The panel did not indicate when it expects to issue a ruling.

Gerber v. Ohio Northern University
On June 30, 2023, a law professor sued his former employer, Ohio Northern University, for terminating his employment after an internal investigation determined that he bullied and harassed other faculty members. On Jan. 23, 2024, the plaintiff, now represented by America First Legal, filed an amended complaint. The plaintiff claims that his firing was actually in retaliation for his vocal and public opposition to the university’s stated DEI principles and race-conscious hiring, which he believed were illegal. The plaintiff alleged that the investigation and his termination breached his employment contract, violated Ohio civil rights statutes, and constituted various torts, including defamation, false light, conversion, infliction of emotional distress, and wrongful termination in violation of public policy.

  • The defendant had until Feb. 20, 2024, to respond to the plaintiff’s second amended complaint.

Other DEI Developments

Feb. 6 America First Legal (AFL) accused the National Football League (NFL) of discriminating based on race and sex in violation of Title VII via a letter to the EEOC. They specifically target the NFL’s implementation of the Rooney Rule, which requires teams to interview minority candidates for head coaching vacancies. AFL argues that this rule unfairly limits opportunities for certain individuals based on race or sex. They directly contacted the NFL Commissioner, demanding action to address what they see as an “assault on Constitutional equality”.

Feb. 2 The Supreme Court denied Students for Fair Admissions’ (SFFA) application for an emergency injunction pending appeal in Students for Fair Admissions Inc. v. U.S. Military Academy West Point. SFFA sought to prohibit West Point from considering applicants’ race during the upcoming admissions cycle. The Supreme Court denied the request for emergency injunction, reasoning that the record before the Court is “underdeveloped.” The case will now return to the Second Court for review.

Jan. 30 Utah Governor Spencer Co-signed House Bill 261 (“HB 261”) into law. HB 261 prohibits state education institutions and government entities from using DEI statements in hiring and providing training promoting differential treatment based on personal identity characteristics.

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