Tennessee employers stay committed to diversity, equity and inclusion despite the pushback

• Joycelyn Stevenson is the office managing shareholder of Littler Mendelson’s Nashville office.
• Dana Palombo is an associate in Littler Mendelson’s Nashville office.

Tennessee employers looking to increase efforts at inclusion, equity, and diversity (IE&D) should take into consideration federal law changes and state reaction to those efforts to meet their organizational goals.

The Supreme Court decisions in Students for Fair Admissions v. President & Fellows of Harvard College and Students for Fair Admissions Inc. v. University of North Carolina held race could not be a factor in college admissions.

In response, Tennessee’s attorney general joined 12 other attorneys general in issuing a letter addressing the Supreme Court’s ruling. The letter specifically addressed companies, in addition to higher education institutions, asking them to comply with race-neutral principles in their employment and hiring practices.

As a result of the increased scrutiny on these issues, companies are currently having their legal teams review their IE&D initiatives and policies to ensure compliance.

Other companies are increasing outside training for managers and C-Suite leaders to protect their efforts at  advancing company goals.

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In addition to considering the effects of Students for Fair Admissions case given the newfound spotlight on the application of race-neutral principles, employers in Tennessee interested in advancing issues of IE&D in their workforce and platforms should also consider current trends from other C-Suite leaders in creating a path forward in the IE&D space.

Littler’s Inclusion, Equity, and Diversity C-Suite Survey Report provides key data that could be instructive for Tennessee employers looking for guidance in this space.

Littler’s survey included feedback from 322 U.S.-based executives, comprising CEOs, chief legal officers (CLOs), chief diversity officers (CDOs), chief human resources officers, and chief people officers.

Littler’s national findings indicated employers remain committed to their IE&D initiatives, with 57% having expanded their commitments over the past year, and 59% believing backlash has increased since the Supreme Court’s affirmative action decisions in June 2023.

Of those surveyed, 91% indicated the recent court opinions have not lessened their prioritization of IE&D. Approximately 6% of respondents decreased their IE&D-related efforts since 2022 based on concerns surrounding legal liability and cost.

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Littler’s survey uncovered clear discrepancies between the proportion of CDOs and CLOs who say their organizations provide incentives to executives (49% versus 8%, respectively), offer diversity mentorships (66% versus 37%), and define metrics for IE&D progress (57% versus 19%).

Responses from CDOs provide a more cautious outlook than do their C-Suite counterparts, perhaps due to their professional insight. These differences suggest better communication is necessary across the C-Suite to minimize legal risk.

Even with the trends showing an increase in prioritization of IE&D issues, companies should remain cautious in applying IE&D metrics because despite well-intentioned actions, it is still imperative not to set unrealistic goals, tie leadership’s compensation to IE&D metrics being met, send out risky company messaging, or accidentally engage in unlawful behavior in furtherance of meeting organizational goals.

IE&D programs that directly or indirectly require or encourage that actual hiring, retention, pay or promotion decisions be based, in whole or in part, on race or gender, can lead to company liability. To that end, it is imperative that CLOs and CDOs are aligned with company goals and limitations to meet the needs of the organization while working within the current state of the law.

The diversity goals and initiatives of employers do not necessarily need to take steps backward. Companies seeking to continue or increase their IE&D efforts should, however, be conscious of risk and review and monitor IE&D programs regularly.

Joycelyn Stevenson is the office managing shareholder of Littler Mendelson’s Nashville office. She counsels companies of all sizes on a range of personnel issues, conducts strategic risk analyses of business decisions as they relate to HR management, manages employment-related litigation, and provides workplace training. Dana Palombo is an associate in Littler Mendelson’s Nashville office. She counsels management on a range of employment law matters.