“DEI & Legal Risk: Insights from an Attorney”
At Ibis, we're all about collaboration.
Not only is it a goal of successful Diversity, Equity, and Inclusion (DEI) work, but it's the way we do business.
We meet our clients where they are.
That means that when they reach a hurdle, we jump too. And today's DEI hurdles are complex. Backlash against DEI initiatives is a threat in many parts of the US and globally.
At Ibis, we lean on the insight of legal advisers to understand each situation...and how to clear hurdles together.
For this month's newsletter, we will help you continue to gain insight too. We interviewed renowned DEI expert and attorney Bonnie Levine, Partner at Gunner Cooke LLP.
Bonnie is an experienced, solutions-focused employment attorney, litigator, investigator, and business advisor, specializing in respectful-workplace initiatives, DEI (diversity equity inclusion), workplace investigations, global distributed workforce management, ethics & compliance, and sustainable growth strategies.
We asked Bonnie a few questions about where DEI resides in today's legal landscape.
What is the current state of legal risk for organizations surrounding DEI initiatives?
There are a few high-level categories of risk associated with DEI initiatives.
Biggest threat to Employers? It’s still Discrimination.
Though DEI’s political opponents are waging highly-publicized targeted litigation battles to scare employers into focusing myopically on “reverse discrimination,” discrimination against historically underrepresented groups—pay discrimination in particular—is the bigger legal threat for most employers.
Employees seeking to recover under a “reverse discrimination” theory need to meet a higher evidentiary standard than employees from historically marginalized groups, and employers can defend such claims if acting pursuant to a lawful affirmative action plan.
Additionally, several provisions of U.S. law require employers to be attentive to demographic imbalance in their workforce or risk eligibility for U.S. government contracts (which require that certain employers implement affirmative action plans), discrimination liability under a “disparate impact” theory (which does not require that an employer intend to discriminate), or liability for pay inequity.
Retaliating Against Grassroots DEI Activities: Out of Bounds
Even if employers try to avoid DEI, their workforce may push forward on their own data exercises and initiatives, activity which is generally protected under the National Labor Relations Act—and U.S. courts have recently affirmed that this type of activity is also protected under anti-discrimination laws, so employers cannot retaliate against DEI advocates.
Collecting personal Demographic Data? Read On.
Collecting, processing, and disclosing DEI-related data is also an area of legal risk, with US employers accustomed to freely collecting demographic data (often required for government reporting) and non-US employers accustomed to never doing so, with certain exceptions for binary male/female gender and disability status.
A Focus On Accuracy.
While not as prominent of a legal risk discussed in the DEI space, employers who make inaccurate public representations can find themselves at risk of, e.g., liability under unfair competition laws, shareholder derivative actions, securities violations, and tort.
Provided that employers implement it with authenticity and with a view toward the specific workforce and circumstances involved, it is my view as an employment lawyer that to ignore or resist DEI poses a greater legal risk than to embrace it.
Bonnie, how do you think companies should address risk?
Center truth and trust. If something undermines either, it will likely cause more harm than good. Performative DEI exercises—particularly those designed for purposes of market competition as opposed to workforce improvement—undermine both, offering low-hanging fruit for would-be “reverse discrimination” plaintiffs while upsetting the employee populations they are intended to serve, and decreasing employee morale all around.
Set realistic expectations. Don’t rush; solve for your own workforce. Different companies have different legal risk calculus based on factors like industry, size, and mission. Seek out appropriate benchmarks and avoid getting distracted by inappropriate ones. Larger companies are more likely to be targeted by politically-motivated lawsuits and also more equipped to defend them with large legal departments and legal budgets.
Respectful data exercises. DEI entails data-driven exercises involving sensitive personal data as defined under data-protection laws. If employees’ data is used in a way that can traced back to them, multinational organizations may be subject to data-protection limitations in using or disclosing it. Additionally, data compilations that are not sufficiently sourced can be misleading, increasing legal risk. A good baseline question to ask is, would this person expect their data to be used in this way? And regardless, would it upset them?
Can you tell us some best practices to integrate Senior Leadership, HR, & Legal leaders as advocates in the organizational commitment to DEI?
Start from the beginning, at the beginning.
Be proactive; when leadership / legal / HR are reacting after a problem has arisen, it isn’t conducive to DEI or compliance.
One suggestion I often make is to focus on training these decision-makers first. Employers often rush to mandate unconscious bias or diversity training for all employees, but the decision-makers are the ones who need it most.
When C-suite executives and other leadership don’t have a baseline foundation of DEI, miscommunications often occur and the DEI process can become more adversarial, which increases legal risk. The same is often true of lawyers and HR professionals.
When someone attacks DEI initiatives as discriminatory, one response I often recommend is to ground the discussion in source material and ask questions from a mindset of curiosity – is the objection coming from a recent headline involving a lawsuit?
There are likely other lawsuits that can be cited for the opposite principle.
Do we have any data on the “base rate” of these lawsuits?
Are the lawsuits coming for companies our size / industry?
What language do you recommend that companies either use/ or avoid when drafting policy reviews, public statements, employee communications and other related material?
Preferred terminology and the law are both evolving quickly in this space. As such, there are no good shortcuts on language to use – it’s all about the process. The best process for crafting communications will involve those impacted. That can be difficult, especially when some communications may be time sensitive.
How can we help organizations navigate these challenges?
DEI exercises often require outside assistance to ensure enough independence and psychological distance to reduce bias in the analysis. Third parties can also administer data collection (third-party data processors can also help ensure anonymity, whether through a law firm or another vendor). Communications with attorneys are generally protected by attorney-client privilege, so employers can benefit from engaging attorneys early to have candid conversations with their high-level decision-makers. Outside experts can provide training or other services as well.
To learn more about how Ibis supports organizations in developing a culture that embraces DEI and is aware of the personal, financial, and legal risk, contact us below.
