Corporate Diversity Policies Face Threats After Supreme Court Ruling

Disruption over job diversity awaits

Thursday’s Supreme Court decision to nullify affirmative action in colleges sent shockwaves through higher education. But the 6-3 ruling finding race-sensitive admissions programs illegal is expected to have far-reaching implications.

Many American business people worry that years of efforts to promote diversity are now open to legal challenge. While this particular case may not overthrow such efforts, it could be heard by the Supreme Court in the future, lawyers and executives said.

The Supreme Court has found: Chief Justice John Roberts wrote in the majority opinion that an affirmative action program cannot be reconciled with the constitution’s equal protection clause. Harvard and North Carolina programs “lack well-focused and measurable goals that justify the use of race, and the negative use of race is inevitable and human It contains species stereotypes and lacks a meaningful end goal,” he added.

While schools may still consider race in some way, such as in personal essays, Roberts said each applicant would be evaluated “on the basis of their personal experience, not their race.” I warned you must.

The business impact can be significant. american company The company has embraced diversity, equity and inclusion policies, especially in the wake of the 2020 protests against the murder of George Floyd. But Thursday’s ruling warned employees and conservative activists, legal objection to those policies.

The number of so-called reverse discrimination allegations filed with federal regulators declined between 2011 and 2021, but recently started to rise, according to USA Today. Two weeks ago, a federal jury ordered Starbucks to pay $25.6 million to a former regional manager who claimed he was fired because he was white.

Over 60 large companies, including GM and Meta, Supreme Court warned Abandoning affirmative action in higher education would make it difficult to build a diverse workforce. Data show that the number of black and Latino students in college is plummeted in the state Such programs are now obsolete.

The ruling also set back efforts to improve board diversity through quotas. 1 month after federal court repealed California law It imposes such obligations on companies based there. The Federal Court of Appeal is considering: Objection to Nasdaq Rules Along similar lines.

Corporate diversity initiatives are not exactly the same as university initiatives. say some experts. Ropes & Gray labor law expert Doug Braley told Dealbook that the Equal Protection Clause does not apply to private employers. Others argue that companies are allowed to actively recruit a wide pool of job seekers in order to hire the best applicants.

Still, Braley said challengers would be brave enough to file a lawsuit if they knew the Supreme Court would accept their case.

Business executives were weighing their next move ahead of the ruling. These may include new ways of approaching diversity in hiring, such as using different languages ​​to achieve the same goal.

And some employers plan to stick to this policy. “Salesforce’s commitment to equality is unwavering, and regardless of today’s ruling, we will continue to work toward our representation goals.” Lori Castillo MartinezThe company’s chief equality officer tweeted.

But diversity advocates fear some companies will simply abandon such efforts in the face of new legal challenges. a corporate diversity consultant told The Washington Post.

what is going on here

Inflation in the Eurozone is mixed. Data released this morning show inflation eased to 5.5% in May. But it also reflects a month-on-month rise in ‘core’ inflation. As a result, the European Central Bank is likely to raise interest rates further. Meanwhile, at 8:30 a.m. ET, the Department of Commerce will release a report on personal consumption spending, which is being watched as a measure of US inflation.

The FTC is reportedly planning to file a large-scale antitrust lawsuit against Amazon. Upcoming lawsuits against e-commerce giant core online marketplaceBloomberg said it unfairly favored online sellers using its logistics software. It would be the biggest move against Amazon yet by the agency’s leader, Lina Khan, who outlined how to counter the company’s hold as a law student.

Koch’s political network has raised over $70 million to stop Donald Trump. Some of the money Americans raise for Prosperity Action, an organization backed by Charles Koch, will help support challengers to the former president for the 2024 Republican presidential nomination. It’s unclear who that might be, given the wavering support for Florida Governor Ron DeSantis.

Washington warned American companies about China’s anti-espionage laws. The National Center for Counterintelligence and Security has warned that new amendments to the law, which take effect on Saturday, could affect the Chinese government. Enhanced access and control over corporate data, according to The Wall Street Journal. The notice comes as China raids the offices of Western-affiliated consulting firms, citing security concerns.

Warren questions Goldman about SVB’s role

A few months after the failure of the Silicon Valley Bank, the role Goldman Sachs played in its final days—as an adviser to lenders and a buyer of bonds—that could have brought Goldman billions of dollars in profits. has drawn scrutiny, including from federal authorities. Now Senator Elizabeth Warren, a Democrat in Massachusetts and an expert on financial regulation, is seeking answers from Goldman, Dealbook first reported.

“This dual role of profiting for Goldman in a struggling economy is reminiscent of the company’s actions during the 2008 financial crisis, when Goldman sold and bet on mortgage-backed securities. We were profiting from both,” Warren wrote in Thursday’s paper.Letter to Wall Street CEO David Solomon

The letter reflects growing attention to Goldman’s role. The company sought to help financially strengthen Silicon Valley Bank in two ways ahead of a potential credit rating downgrade by Moody’s. One was to buy SVB’s $21.4 billion worth of bonds and the other was to advise on a planned $2.25 billion equity sale. (The equity raise fell through as the bond sale forced SVB to write down $1.8 billion, surprising investors.)

On the debt side, Goldman bought SVB’s loan book at a steep discount and later resold it for a profit. It’s a fairly typical move, but given the aftermath of the SVB collapse, it’s getting a lot of attention here. Goldman offered clients the chance to hire another adviser for a debt deal, but SVB turned it down, Dealbook previously reported.

“Goldman Sachs appears to have profited at almost every stage of the Silicon Valley bank failure.‘” Warren wrote. He told Goldman about the underwriting fees it received for advice on its failed fundraising, how much it paid for the SVB loan, and what happened to the value of that debt in the weeks following the bank’s collapse. asked to disclose.

Goldman Sachs spokesman Tony Flatt told Dealbook: However, it is well known that banks do not charge a fee if the capital increase is cancelled. He added that the company also made $50 million from loan sales.

Doubts swirl in the market after a strong first half

Stocks rallied on Friday and returns far beat Wall Street expectations, making for an impressive end to the first six months of the year.

Nasdaq Composite on track for best first half performance in 52 years of history, fueled by investor euphoria for tech companies devoting all their energy to artificial intelligence. A boom in tech stocks has warned some seasoned investors. foam This also helped push the S&P 500 into a bull market this month.

Other winners include Bitcoin, which surged more than 80% this year despite a crackdown on Japanese stocks and cryptocurrency companies.

On the other side of the spectrum… Last year’s big winners, energy stocks, commodities and oil, are all in the red.One big reason is the Chinese economy. not rebound As expected, after restrictions due to Covid were lifted.

There are many more danger signs. The central bank has yet to finish raising rates to combat persistently high inflation, and more may be forthcoming. squeeze corporate profits. And concerns over economic growth have not disappeared.

John Lynch, chief investment officer at Comerica Wealth Management, expects a more bleak outlook ahead. “Despite more volatility this summer, we expect the S&P 500 to be worth quite a bit around its current levels (4150-4200) by the end of the year,” he said in his mid-year outlook. That would represent a drop of about 5% from the market close on Thursday.

How oligarchy buys influence

As President Vladimir Putin sought to assert control over the Wagnerian mercenary gang led by Evgeny Prigozhin this week, the dealbook recalled previous efforts by the Russian president to curb domestic billionaires. They were expected to build their wealth after the collapse of the Soviet Union and remain loyal to President Putin.those who were not Exiled or Worse.

The oligarchic strategy also includes the acquisition of influence in the West. a documentary An article published this week by Britain’s Channel 4 details how ex-KGB spy turned wealthy banker Alexander Lebedev and his son Evgeny were incorporated into the country’s establishment.

Accusations include:

• They befriended the elite and bought two newspapers to influence public opinion. They used the Evening Standard to endorse Boris Johnson when he was Mayor of London.

• When Johnson became prime minister, he nominated Evgeny to the House of Lords despite warnings from Britain. intelligence agency.

• Mr Johnson attended a party at Mr Lebedev’s Italian residence in 2018 without security guards or other British government officials. At the time, Italian intelligence services believed the facility was being used for espionage and monitored it.

Johnson and Evgeny Lebedev deny the allegations. But experts say the relationship is not unique and has broader implications. “Evgeny Lebedev is kind of a caricature of a broader trend, but it’s an important trend,” said Oliver Blow, author of Moneyland: The Story Behind the Scammers and Thieves Who Rule the World. told the book. “Boris Johnson not only overturned recommendations on Lebedev, but also tried to cover up reports on Russia from the Congressional Intelligence and Security Committee.”

speed reading

Information of sale

• China’s fast fashion giant Shane denies reports The company has filed for an initial public offering in the United States. (Axios)

• Inflectional AIis a chatbot startup founded by the co-founders of LinkedIn and Google’s DeepMind, which has raised $1.3 billion from investors including Bill Gates and Nvidia. (Bloomberg)

policy

• This morning, under pressure from the United States and the Netherlands, announced new rules Further restrict exports of chip manufacturing equipment to China. (Reuters)

• Issuance of RMB-denominated bonds So far this year, the total amount has reached $10.4 billion, setting a new record and contributing to the internationalization of China’s currency. (Bloomberg)

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