New Attacks on Affirmative Action, DEI Likely After Court Opens Minority Agency to Whites

Principles of affirmative action and diversity, equality, and inclusion (DEI) in business hiring and support are coming under increasingly heavy fire from opponents. Several are looking to push last year’s Supreme Court ban on racial considerations in college admissions deep into the business world as well. The latest example of that was a successful court case against the Minority Business Development Agency, which in the absence of a Biden Administration appeal must now accept white applicants or face accusations of discrimination.

The offensive against DEI in business isn’t new, with threats of litigation and public hectoring having led many companies to reword their policies to avoid attack. But the ruling by a Texas judge last month in favor of a trio of white business owners–who argued the rejection of their applications to the Minority Business Development Agency (MBDA) violated their rights–reflects a widening of the war on affirmative action-inspired measures. And with the Biden Administration giving no indication of fighting that decision, it seems likely those legal disputes will multiply.

Created by the Nixon Administration and currently operating with a $550 million annual budget, the MBDA describes its mission as assisting “minority business enterprises… owned and operated by socially or economically disadvantaged individuals.” That aid can be financial, administrative, or facilitating access to markets and contracts. But it hasn’t been considered open to entrepreneurs from the nation’s white majority population. 

Once informed they did not qualify for the program after applying, the three plaintiffs in last month’s Texas case sued the agency for violating their 14th Amendment rights, which guarantee equal protection under the law. Their victory is expected to inspire additional offensives in a campaign gaining momentum.

The case was based in part on the June 29 Supreme Court ruling that ended decades of colleges and universities factoring applicants’ race into their admissions processes. With that cornerstone of affirmative action policies shattered, conservative groups have been using the courts to attack DEI practices in business and government administration, too. In siding with two of the three plaintiffs in the MBDA case, Judge Mark T. Pittman also harkened back to that historic June decision–and channeled the partisan swagger of Donald Trump, the president who appointed him to the bench.

“If courts mean what they say when they ascribe supreme importance to constitutional rights, the federal government may not violate such rights with impunity,” Pittman wrote in warning to the MBDA, future agency targets, and the wider the Biden Administration–whose student loan forgiveness plan he struck down in 2022. “Time’s up.”

What are the consequences of that decision, especially in the absence of a Department of Justice appeal? 

For starters, the MBDA informed staff at its 40 offices across the U.S. and Puerto Rico the agency will comply with the ruling and no longer use race as a factor in processing applications. According to the Washington Post, candidates will instead have to sign a statement attesting they are both disadvantaged, and owners of a minority business–definitions that, in the wake of the Texas ruling, may also wind up defined by courts if companies not selected protest.

That doesn’t mean companies the MBDA was created to serve can’t get the backup they request and need. But they may find themselves battling a lot more competition for funding and other assistance if a lot of white-owned enterprises also begin applying.

Meanwhile, both the court decision in Texas, and the absence of an appeal by the administration, suggests the successful case against the MBDA will inspire other DEI critics as the movement behind it snowballs. It follows a campaign in Tennessee last July that forced changes in a Small Business Administration program helping minority-owned businesses obtain government contracts. Litigation demanding changes to a similar U.S. Transportation Department policy that factors racial and ethnic identity in its contracting activities is now also pending.

Parties to the Texas suit, meantime, aren’t finished with the MBDA yet. Despite the agency’s agreement to comply by not taking race into consideration in vetting applicants, the plaintiffs’ lawyer, Dan Lennington of the conservative Wisconsin Institute for Law & Liberty,  told the Post that wasn’t enough.

“MBDA is shirking its responsibility to decide who qualifies for assistance by using a standardless process and delegating decision-making to individual applicants,” he wrote in an email to the paper. “Apparently, an applicant can now qualify for federal assistance if they merely feel disadvantaged. But it is MBDA who should be making these decisions on eligibility based on facts, not the beneficiaries of such programming based on feelings.”

Consider that a warning to companies rewording their DEI policies in the hopes of side-stepping attack that way.