Strictly speaking, no. SFFA only directly applies to college admissions.

However, it is important to consider the legal grounds under which SFFA was decided to understand how it may influence future litigation. In SFFA, the Court based their ruling on the Equal Protection Clause, but also interpreted Title VI of the 1964 Civil Rights Act—a federal statute that applies to institutions receiving federal funds—to embody the same prohibition as the Equal Protection Clause. This raises a question as to whether similar claims can be successfully brought under similar statutes, specifically Title VII of the 1964 Civil Rights Act (“Title VII”), which deals with employment discrimination. There’s also 42 U.S.C. § 1981 (“Section 1981”), which derives from the post-Civil War 1866 Civil Rights Act that guaranteed certain rights held only by white people to all citizens of the United States, particularly to make contracts and hold property. It is sensible to assume the Court will interpret these statutes in the same way it interpreted the Equal Protection Clause in SFFA. This has emboldened litigants who previously targeted affirmative action to extend their efforts to more recent diversity, equity, and inclusion (“DEI”) programs and initiatives.

What about hiring practices in businesses and corporations?

The Supreme Court has long held that under certain circumstances, considering an applicant’s race in hiring decisions is a constitutional practice under Title VII of the Civil Rights Act of 1964, and the SFFA decision has no bearing on this precedent. Under Title VII, private sector employers are allowed to voluntarily adopt race-conscious affirmative action programs “designed to eliminate conspicuous racial imbalance in traditionally segregated job categories,” so long as it does not “unnecessarily trammel the interests of white employees, neither requiring the discharge of white workers and their replacement with new black hirees, nor creating an absolute bar to the advancement of white employees.” United Steelworkers v. Weber, 443 U.S. 193, 197, 209 (1979). Additionally, any affirmative action program an employer implements must be “temporary in measure, not intended to maintain racial balance, but simply to eliminate a manifest racial imbalance.” Id. at 197. The Supreme Court may reexamine whether affirmative action in the employment context is constitutional.

What about hiring practices in foundations and other nonprofit organizations?

The SFFA decision did not mention foundations or other nonprofit organizations. In general, most philanthropic foundations, charities, and nonprofits do not receive federal financial assistance and therefore are not subject to rulings under Title VI of the 1964 Civil Rights Act. Yet, like businesses and corporations, these private and public entities may face similar concerns that litigious plaintiffs will sue under Title VII for reverse discrimination in race-based hiring or board diversity practices. As stated previously, under certain circumstances affirmative action in employment decisions is constitutional under Title VII. However, it is still important for organizations to review the applicable federal, state, and local employment laws to ensure their practices are compliant. Section 1981 may also provide a basis for litigation concerning any contracts that foundations or other nonprofits enter.

What about DEI programs and initiatives?

SFFA applies solely to affirmative action in college admissions and does not directly impact DEI programs and initiatives. DEI programs and initiatives remain legal so long as they are compliant with existing employment and anti-discrimination law. However, the SFFA decision has emboldened various groups and individuals to bring claims challenging the legality of DEI programs and initiatives across various sectors, including those in public corporations, private businesses, foundations, and other nonprofits.

In American Alliance for Equal Rights v. Fearless Fund, Edward Blum, the conservative activist who founded Students for Fair Admissions and the American Alliance for Equal Rights, sued Fearless Fund, a venture capital fund that invests in women of color led businesses. Blum claims that Fearless Fund violates 42 U.S.C. § 1981 because at least one of their grant competitions awards money only to Black women. Section 1981 allows for suits against any individual in the private sector who racially discriminates in the making and enforcing of contracts, and many other plaintiffs similar to the American Alliance for Equal Rights believe grant programs that give money to non-white business owners discriminate against white business owners. On September 30, 2023, the Court of Appeals for the Eleventh Circuit issued a temporary injunction against Fearless Fund, finding that the grant program was “racially exclusionary” and “substantially likely” to violate Section 1981.

The American Alliance for Equal Rights also sued Perkins Coie, Morrison Foerster, and Winston and Strawn, targeting the law firms’ “diversity fellowships” that honor diverse law students with stipends and scholarships after being hired to work for the law firms. They argue that these fellowships—which are contracts between students and the law firms—violate Section 1981 because the eligibility criteria excluded white and Asian applicants, specifically requiring applicants be “in a historically underrepresented group in the legal profession, including racial/ethnic minority groups” such as “African American/Black, Latinx, Native Americans/Native Alaskans.” In response to pending litigation, the law firms Morrison Foerster and Gibson, Dunn & Crutcher have opened up their fellowship programs to all applicants and eliminated language referencing “historical underrepresentation” from their applications.

While many large and influential employers seem to remain committed to diversity practices, complaints challenging DEI programs and initiatives have grown increasingly common since the SFFA decision. As a result, businesses and other organizations will likely continue to modify their policies, settle lawsuits, and/or risk injunctions in the face of anti-DEI litigation.