DE&I Initiatives Face Challenges in Florida, Texas, and Beyond

By EMMA CHASE

Employers across the country have ramped up their diversity, equity, and inclusion (DE&I) efforts for multiple reasons ranging from increasing innovation, better meeting client goals, and improving retention among existing employees. So, what happens when these well-intentioned programs are challenged with conflicting laws? Are companies better off focusing more resources on their DE&I programs, or abandoning them altogether?

More recently, on February 6, 2023, Texas Governor Gregg Abbott’s office issued a directive to state agency and public university leaders instructing them that the use of DE&I initiatives in hiring would be considered illegal and contrary to state and federal employment law. Governor Abbott’s Chief of Staff, Gardner Pate, wrote that DE&I initiatives cannot be based on factors “other than merit” because the “innocuous sounding notion of Diversity, Equity and Inclusion (DEI) has been manipulated to push policies that expressly favor some demographic groups to the detriment of others.”

The directive comes on the heels of other initiatives in Texas to end DE&I programs. State Lieutenant Governor Dan Patrick has proposed to end tenure and restrict conversations about race and racism in public college classrooms, and in 2022 State Representative Carl Tepper of Lubbock, Texas filed a bill prohibiting state funding toward “any office of diversity, equity, and inclusion,” or an office that supports DE&I goals.

Governor Abbott’s directive does not apply to private sector employers, but it gives insight into the way his administration views state and federal employment laws. As such, employers with employees located in Texas should closely monitor further developments and keep an eye out for lawsuits related to DE&I initiatives in the workplace.

On the Other Hand: California, Washington Laws Require Public Company Board Diversity

The Latest on Florida’s Stop WOKE Act

Recent state law developments have muddied the waters on what may have previously been deemed a straightforward best practice: the pursuit of a more diverse workforce. For example, Florida Governor Ron DeSantis signed the state’s Individual Freedom Act, dubbed the “Stop Wrongs to Our Kids and Employees Act” or “Stop WOKE Act,” on April 22, 2022. As written, the Act would amend the Florida Civil Rights Act and prohibit employers from forcing employees to participate in so called Critical Race Theory-influenced training as a term and condition of employment. Specifically, the Act prohibits employers from requiring employees to participate in activities that imply a person’s status as either privileged or oppressed is necessarily determined by the person’s race, color, national origin, or sex.

The implementation of the Stop WOKE Act has been partially put on hold by an August 18, 2022, federal district court decision, wherein Chief Judge Mark Walker of the U.S. District Court for the Northern District of Florida issued a preliminary injunction partially blocking enforcement of the Stop WOKE Act against employers by the Florida Commission on Human Relations (FCHR) and the Florida Attorney General. However, the Act still provides a private right of action for individual employees who feel aggrieved, and that provision is currently in effect regardless of the preliminary injunction.

Currently, the district court decision enjoining the FCHR and Attorney General from enforcing the Stop Woke Act against employers is on appeal in the Eleventh Circuit, which sits in Atlanta, Georgia. The Eleventh Circuit has previously overturned Chief Judge Walker’s rulings against Governor DeSantis regarding felony voting rights and election integrity issues. That said, it is unclear how the Eleventh Circuit will come down in this appeal.

On the other hand, blue-leaning states have been developing legislation to require DE&I efforts in hiring. In 2020, the State of Washington enacted a Gender-Diverse Board of Directors law that requires certain public corporations to have at least 25% of their boards be made up of people who identify as women. The law requires employers to disclose to shareholders how they consider diversity of the board and provide measures taken to address a lack of diversity.

In 2018, California enacted Senate Bill 826, requiring publicly held corporations with principal executive offices in California to include a certain number of female board directors, dictated by the size of the board. In 2020, California Governor Gavin Newsom signed Assembly Bill 979 into law, similarly requiring publicly held corporations with principal executive offices in California to include a minimum of one director from an “underrepresented community.” Each of these laws imposed fines for non-compliance.

Both of the California laws were subsequently challenged and overturned in the courts. The State Superior Court sitting in Los Angeles held in 2022 that the law aimed at gender discrimination violated the state constitution’s Equal Protection Clause and that there is “no compelling government interest in remedying generalized, non-specific allegations of discrimination.” Also in 2022, the California law aimed at ending discrimination against “underrepresented communities” in board leadership was also overturned under the state Equal Protection Clause. The court found that the law treated similarly situated, qualified potential corporate board members differently based on their race, sexual orientation, and gender identity without sufficient justification.