For more information please call  800.727.2766


The Balancing Act of Diversity Hiring

The Balancing Act of Diversity Hiring

In 2019, over 170 chief legal officers publicly notified their outside counsel that they expected to see “manifest results with respect to diversity and inclusion.” Reminding law firms of the millions of dollars they spent on legal services, these officers asserted, “We expect the outside law firms we retain to reflect the diversity of the legal community and the companies and the customers we serve.”

It is undeniable that a more diverse workplace improves outcomes across a variety of categories. Diverse workforces that include more women and expand ethnic and cultural diversity have increased profitability.[1] They are smarter and more innovative.[2]  They also may increase productivity, improve employee engagement, reduce employee turnover, improve company reputation, and offer a wider range of skills.[3]

Yet, the practical development of a diverse workplace may clash with the anti-discrimination laws meant to protect the very groups needed to create that diverse workplace. Where do Title VII’s protections from discrimination become incompatible with an employer’s efforts to create a diverse workforce? As employers and clients become increasingly more proactive in ensuring that their workforce reflects the larger community, there may be legal challenges to their reasons for making these decisions.

Title VII of the Civil Rights Act is the federal law that prohibits employers from discriminating against their employees based on race, color, national origin, sex, and religion. These prohibitions apply to recruiting, hiring, promoting, transferring, training, disciplining, discharging, assigning work, measuring performance, and/or providing benefits. Under this statute, employers may not consider race, color, sex or any other protected group when making any type of employment decision.

The U.S. Supreme Court has recognized an exception to Title VII’s protections from discrimination in industries where employers can establish a historical imbalance or disparity in the workforce. In United Steelworkers of America, AFL-CIO-CLC v. Weber, 443 US 193 (1979), the Supreme Court considered an affirmative action program that was implemented to increase the amount of black skilled craft workers. Half of the positions in the training program were reserved for black workers. Because this training scheme was intended to eliminate longstanding patterns of racial segregation and Title VII “did not inten[d] to prohibit the private sector from taking effective steps” to ensure the goal to prevent discrimination was implemented, the program was upheld. This same theory was applied to the underrepresentation of women in Johnson v. Transp. Agency, Santa Clara Cnty., Cal., 480 U.S. 616 (1987). A male worker had challenged the agency’s selection of a female worker over him. Here, the court upheld the Santa Clara County Transportation Agency’s plan to “achieve a statistically measurable yearly improvement in hiring and promoting minorities and women in job classification where they are underrepresented.” Where no specific number or quota was required but short-range goals were implemented and adjusted yearly, the agency could permissibly take sex into account as one factor in deciding whether to promote women.[4]

According to guidance issued by the Equal Employment Opportunity Commission (and based on the Weber decision), a voluntary affirmative action program stands on solid legal ground if 1) an analysis reveals that existing or contemplated employment practices are likely to cause an actual or potential adverse impact; 2) a comparison between the employer’s workforce and the appropriate labor pool reveals that it is necessary to correct the effects of previous discriminatory practices; and 3) a limited labor pool of qualified minorities and women for employment or promotional opportunities exists due to historical restrictions by employers, labor organizations, or others.[5]

Most private employers are unlikely to meet the standard for a voluntary affirmative action plan. But what about diversity efforts, which are aimed at avoiding present and future discrimination? In the context of university admissions, the U.S. Supreme Court has upheld the compelling interest of diversity subject to restrictions. Fisher v. University of Texas 136 S. Ct. 2198 (2016). The University of Texas used race as one of many factors it relied upon in deciding undergraduate admissions. UT’s goal was an “academic environment that offers a robust exchange of ideas, exposure to differing cultures, preparation for the challenges of an increasingly diverse workforce, and acquisition of competencies required of future leaders.’” Relying on a multi-tiered approach, race was one possible “special characteristic” that also looked at the applicant’s academic qualifications, essay scores, letters of recommendation, background, and socioeconomic factors. Finding the process legally acceptable, the Court remarked that it was because “consideration of race is contextual and does not operate as a mechanical plus factor for underrepresented minorities.” It was a “factor of a factor of a factor.”

Using the Fisher decision as a guide, perhaps employers would be permitted to use race, gender, or other protected characteristics as one factor of many in making employment decisions. However, there are risks. Take recent lawsuits against Google where two white men alleged that diversity efforts resulted in discrimination against them. James Damore brought his lawsuit after being fired for circulating an anti-diversity paper. He asserted that there are inherent intellectual differences in men and women. His lawsuit includes claims for discrimination based on his sex and his “Caucasian race.” A white recruiter has also filed a lawsuit against Google, claiming the company used discriminatory hiring practices that discouraged the hiring of whites and Asians. He claimed the company favored Hispanics, African-Americans, and women. In 2018, the Sixth Circuit Court of Appeals upheld the right of a white male employee to proceed in a discrimination claim. Palmer v. CSC Covansys Corp. (E.D. Mich. Sep. 25, 2018). CSC was accused of laying off Palmer, who was white and male, because the company favored Indian workers in both hiring and promotion programs. In allowing Palmer’s claim to proceed, the court ruled that Caucasian-Americans are protected like every other race.

The Mansfield Rule and the Law

Notwithstanding possible legal challenges, the pressure to change remains. In July 2019, Diversity Lab initiated the “Mansfield Rule” with a focus on legal departments after finding that women and diverse attorneys “are not advancing to partnership at the same rate as their majority counterparts.”[6] The “Mansfield Rule” sets benchmarks that women, minority, disabled and LGBTQ+ lawyers make up at least 30% of the candidate pool for equity partner promotions, lateral partners and mid/senior-level associates; practice groups and office head leadership; executive committee and/or board of directors; partner promotions/nominations committees; and chairperson and/or manager partner.[7] The program also asked that at least 50% of the applicants considered for internal roles and outside counsel be from underrepresented groups.[8] At least 22 legal departments have signed up from major companies such as Ford Motor Co., PayPal Holdings, Inc., Uber, and U.S. Bank.

Some companies have been engaging in this effort for years. In 2017, Hewlett-Packard Inc. created a “diversity holdback” policy that penalized firms that did not meet its minimal diversity staffing requirements by withholding 10 percent of invoiced fees. Firms were required to have a least one diverse firm relationship partner that regularly engaged with HP along with at least one woman and one racially/ethnically diverse attorney “performing or managing at least 10% of the billable hours.”[9] HP recently asserted that companies meeting this requirement have doubled. Microsoft’s decade-old Law Firm Diversity Program incentivizes inclusion by offering a bonus to its outside firms that increase the diversity of their partners.[10] Microsoft general counsel Dev Stahlkopf said the company has “seen quantifiable progress as a result of our incentive-based approach, and we believe that these advances have increased the quality of the representation we get and improved our results.”[11]

Steps That Can Be Taken

While setting firm targets and/or quotas may be legally challengeable, there are appropriate steps that can be taken to increase the diversity of your employees:

  • Assess the diversity of the current hiring process (as well as other employment decisions including promotion, salary increases, and job assignments). Make sure that the standards, requirements, and methods of hiring new employees are clear, neutral, and unbiased.
  • Avoid requirements that could unfairly prejudice a certain group.
  • Look at the language used in job descriptions, consider whether it may discourage candidates from protected groups.
  • Be conscious of the employment decisions you make, ensuring that candidates are considered as a whole and not based on a certain protected trait.
  • Monitor the communications and processes used throughout the company’s employment decision processes, recognizing unconscious biases that may be used in making employment decisions.
  • Diversity attracts diversity. Diverse candidates are attracted to workplaces that reflect the company’s ability to hire and retain diverse employees.
  • Referrals, often a key way to bring on new employees, should also be from diverse employees.[12]

Special attention to these steps is even more important during the COVID-19 pandemic. In a recent interview, the CEO of Diversity Lab discussed the statistics from the 2008 recession and its impact on diversity. CEO Caren Ulrich Stacey noted that gains in the diversity of the legal profession began to dip with that recession and numbers of African-Americans only came back up to pre-recession levels in the last year.[13] She pointed out that the same unconscious biases that exist in allocating work and performance reviews emerge when deciding who to lay off during an economic downturn. Instead, she recommended “doubling down” on diversity and inclusion efforts. Her recommendations - a) pay attention to who is getting assigned work and who is not; b) make sure all employees, including diverse employees, have a connection within the company to share concerns with; and c) check-in with all employees to see how they are faring and serving clients, reviewing to make sure that all employees, irrespective of gender, race or other demographics, are coping fairly equally. She emphasized that firms and companies must be vigilant to ensure that they do not lose a disproportionate number of diverse employees.

Video-conferencing tools such as Zoom, WebEx, and FaceTime - pandemic essentials, may contribute to this loss of diversity. As a recent article in Fast Company pointed out, implicit bias accompanies us virtually as well. So much of hiring is based on appearance, particularly for women.

“There’s nothing wrong with a virtual hiring process, but it is unrealistic to assume that persistent biases don’t transfer to video job interviews. Those conducted during this pandemic, when access to salon services is restricted and otherwise appearance-enhancing products like hair dye and even hair shears can be hard to come by, put some candidates at a distinct disadvantage. Like it or not, how we present ourselves can influence whether we get the job or not, and all applicants should get a fair shot.”[14]

Telephone interviews offer employers the opportunity to minimize their unconscious biases by preventing visual impressions early in the hiring process. The world may be vastly different right now but companies are still required to make sure that they are selecting qualified candidates for reasons that align with the legal protections imposed by Title VII and to work toward creating a diverse, and ultimately inclusive, workforce.

[1] Vivian Hunt, Lareina Yee, Sara Prince and Sundiatu Dixon-Fyle, Delivering through diversity, McKinsey & Company, January 2018.

[2] David Rock and Heidi Grant Why Diverse Teams Are Smarter, Harvard Business Review, November 4, 2016.

[3] Lauren Clarke, 8 Amazing Benefits of Cultural Diversity in the Workplace, 6 q,

[4]See also United States v. Paradise 480 U.S. 149 (1987) (The Supreme Court upheld a district court order to mandate a one-to-one ratio of white and black state troopers for hiring in the State of Alabama. The majority ruled the race-focused hiring practice was necessary to address the rampant discrimination that previously occurred in the Alabama Department of Public Safety.)

[5] 29 CFR § 1608.3

[6] Businesses double down on mandating diversity from outside counsel, ABA Journal, May 1, 2019.

[7] Cathy Hinger, Why the Mansfield Rule Matters, JDSUPRA, March 19, 2020.

[8] Dan Clark, More Than 20 Legal Departments Sign on for In-House Mansfield Pilot Rule, Corporate Counsel, October 24, 2019.

[9] Debra Cassens Weiss, HP general counsel tells law firms to meet diversity mandate or forefeit up to 10% of fees, ABA Journal, February 15, 2017.

[10] Businesses double down on mandating diversity from outside counsel, ABA Journal, May 1, 2019.

[11] Id.

[12]Riia O’Donnell, How to Hire for diversity while avoiding ‘reverse’ discrimination claims, HR Dive, Oct. 18, 2018.; Cindy Ann-Thomas, Dear Littler: Will These Recruiting Ideas Help Me Meet Our Diversity Goals?, Littler, May 2, 2018.

[13] Lisa Helm, Diversity Lab CEO’s Recession Advice for Law Firm Leaders? Double Down on Diversity, Law Journal, April 5, 2020.

[14] Lea Goldman, Using Zoom for job interviews right now makes an age-old problem even worse, Fast Company, April 8, 2020.