Abstract
Excerpted From: Atinuke O. Adediran, Racial Targets, 118 Northwestern University Law Review 1455 (2024) (241 Footnotes) (Full Document)
Since 2020, hundreds of large companies have voluntarily disclosed racial hiring and promotion goals with specific numerical targets. In 2022, for instance, Meta publicly declared its goal of increasing representation of people of color, including Black leadership, by 30% between 2020 and 2025. In 2021, Sonoco--a global packaging company--announced its goal to have 15% of its senior leadership be people of color by 2023. In 2020, Starbucks stated its goal to have 40% of its retail roles and 30% of its enterprise roles filled by people of color by 2025. These are not isolated instances. Hundreds of large companies have made similar statements.
This Article refers to these public statements as “racial targets.” Racial targets are nonbinding, voluntary goals or aspirations made by companies to hire or promote people of color by a future point in time. Typically, these goals are for hiring racial and ethnic minorities on a general institutional level, such as among employees, boards of directors, managers, and other leaders. This contrasts with racial quotas, which federal courts have found to be illegal.
Racial quotas involve a fixed number or proportion of opportunities reserved exclusively for certain minority groups in particular jobs or occupations, often imposed on employers through collective bargaining with unions and by courts. Racial quotas are examined under different legal regimes depending on context. In the context of private employers, racial quotas have been analyzed under Title VII of the Civil Rights Act of 1964. The seminal Supreme Court case on the legality of racial quotas in companies is United Steelworkers v. Weber. To determine whether a racial quota is legal in the employment context, an employer must show that (1) the program is designed to open employment opportunities for minorities in occupations that were traditionally closed to them, (2) the preference does not unnecessarily trammel the interests of white employees, and (3) the plan is not meant to maintain racial balance. Lower federal courts have struck down racial quotas not meeting the Weber standard, particularly those used “during the remedial phase of a desegregation” plan.
The bottom line is that with few exceptions, regardless of the setting or the legal provision on which they are based, courts have generally found, and the public has generally accepted, that racial quotas are illegal or unconstitutional.
In contrast, courts and scholars have yet to grapple with the legality of the use of racial targets. Unlike quotas, racial targets provide institutional goals to promote workforce racial and ethnic diversity at some point in the future. Racial targets have historical antecedents in civil rights affirmative action plans established and debated between 1961 and 1985 during the administrations of Presidents John F. Kennedy, Lyndon B. Johnson, Richard M. Nixon, and Ronald Reagan. At the time, the federal government instituted executive orders, public--private partnerships with large companies in what was known as the “Plans for Progress Program,” and the National Alliance of Businessmen (NAB). The government also mandated affirmative action programs in the construction business through the “Philadelphia Plan.” Compounding government pressure to hire and promote Black people and other people of color, the Civil Rights Movement of the 1960s also made demands of corporations through demonstrations, protests, sit-ins, and boycotts to hire more Black people in nonmenial positions and train them for promotion. The Civil Rights Movement had a major role in pressuring companies to open up job opportunities for racial minorities at that time. Thus, an amalgam of private, governmental, and social movement efforts led companies to support hiring “goals and timetables” which they and the government believed differed from racial quotas.
Intense scholarly debates around corporate purpose, corporate diversity, and environmental, social, and governance (ESG) activities have touched on race as one area of focus for large companies as they attempt to respond to societal and shareholder pressure-- specifically, the pressure to address racial and other social inequalities after the murder of George Floyd, which led to protests in at least 140 cities across the United States. There were also protests in Africa, Asia, Europe, and the Middle East. These protests and their aftermath have been called a racial reckoning. But absent are thorough evaluations of the specific ways in which companies are attempting to address racial inequality.
This Article joins Professor Lisa Fairfax and a growing number of scholars engaged in the challenging task of ferreting out the 2020 racial reckoning's impact on corporate behavior. After examining corporate commitments made after the racial reckoning, Fairfax found that Fortune 500 companies that made public statements about race were two times more likely to appoint a Black director as compared to companies that did not make public statements. She also found that the majority of new director appointments for companies that made these statements were people of color, while the majority of new appointments for companies that did not make these statements were white.
This Article centers the doctrinal and political implications of how companies are attempting to racially diversify their workforces with racial targets. It addresses the history, law, and empirical analysis of this corporate move. The Article examines 1,000-plus public and privately held companies to reveal the unstudied phenomenon of racial targets and provide insight into their shape, prevalence, and characteristics. It shows that there are two kinds of targets: closed-ended and open-ended. Closed-ended targets often include a stated year by which a company intends to meet a goal. Open-ended targets are goals and aspirations that do not include a stated year by which the goal would be met.
The Article analyzes both types of targets under the standard set forth by the Court in Weber. It concludes that under the Weber standard, companies can argue that targets are legal if they can show that (1) these public commitments are designed to open employment opportunities for people of color in areas that were traditionally unavailable to them, (2) the commitments do not bar white people from advancement, and (3) the plans are temporary and not meant to maintain racial balance. Companies can also argue that racial targets are legal because of distinctions between quotas and targets. The legal defensibility of racial targets remains largely unchanged by the Supreme Court's decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College because private employment decisions are distinct from admissions decisions made by federally funded universities. The historical discretion given to companies to define and carve out how they intend to comply with federal antidiscrimination law may also provide a shield.
But despite their defensibility, the conservative backlash against racial targets has already begun. The reputational costs of retracting a racial target should incentivize companies to keep them within the boundaries of the law. Legal defensibility aside, however, this corporate approach of addressing racial inequality warrants some normative concerns. While this Article does not make a normative claim about racial targets or defend them as a corporate strategy for racially diversifying large companies, it notes the need for further analysis to examine whether, from a policy perspective, racial targets benefit people of color.
The Article makes four contributions. First, it describes the history of quotas dating back to the 1960s, highlighting how companies have been drawn to numerical goals in the context of race. Second, it empirically shows that racial targets are a post-2020 racial-reckoning phenomenon with connections to the history of racial quotas. Third, it shows that while the doctrine is ambiguous, companies can defend the legality of racial targets. Fourth, it highlights the conservative backlash against racial targets, which is likely to intensify. Because there is already a strong conservative movement to fight race consciousness, an understanding of the empirical, historical, and legal landscape of racial targets is crucial.
This Article proceeds in three Parts. Part I empirically examines racial targets after 2020's racial reckoning, highlighting the difference between closed- and open-ended targets. Part II reviews the law and history of racial quotas, examining the Civil Rights Movement through the 1980s, the Weber standard, and the distinction between private and public actions to address racial inequality. Part III focuses on the doctrinal defensibility of racial targets. It also addresses the ideal of corporate discretion, which may be useful to companies if they confront legal attacks in the pro-business Supreme Court.
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This Article defines racial targets as voluntary goals or aspirations to hire or promote people of color by a future point in time on a general institutional level, such as among employees, boards of directors, managers, and other leaders. Racial targets are therefore distinct from racial quotas, which are mandatory requirements to hire or promote people of color in certain jobs or occupations by a future point in time. This Article makes four key contributions. First, it details the history of racial quotas and their relationship to companies' accustomed use of numerical targets and goals to racially diversify their workforces, thus connecting the use of racial targets today to historical contexts. Second, it empirically shows that racial targets are a post-2020 racial reckoning phenomenon with connections to the history of racial quotas. Third, it shows that while the doctrine is ambiguous, companies can defend the legality of racial targets. Fourth, it highlights the conservative backlash against racial targets, which is likely to intensify. Because there is already a strong conservative movement to fight race consciousness, an understanding of the empirical, historical, and legal landscape of racial targets is crucial. In making these contributions, the Article notes the historical discretion afforded companies to choose how to racially diversify their workforces.
While this Article does not make a normative claim about whether targets are a good or bad strategy, it notes here the need for further research and analysis to determine whether targets are beneficial to people and communities of color. This Article not only addresses but also raises the question of how companies are meeting or intend to meet their racial targets and the policy consequences of establishing hiring and promotion goals.
J.D., Ph.D., Fordham University School of Law.
