Activist Challenges Corporate Diversity Programs Using Civil War-Era Law

The anti-affirmative action advocate responsible for the successful U.S. Supreme Court challenge to race-conscious college admissions policies is now employing a Civil War-era law, originally intended to safeguard formerly enslaved Black individuals from racial bias, to dismantle corporate diversity programs across America.

In a series of lawsuits filed since August, Edward Blum's American Alliance for Equal Rights organization has taken legal action against grant and fellowship initiatives established by a venture capital fund and two law firms. These programs aim to enhance career opportunities for Black, Hispanic, and other underrepresented minority groups.

All three lawsuits accuse the respective entities of violating Section 1981 of the 1866 Civil Rights Act, a legislation enacted following the Civil War. This law guarantees all individuals the same rights to form and enforce contracts "as is enjoyed by white citizens." While originally designed with formerly enslaved Black people in mind, courts have long interpreted it as also protecting white individuals from racial discrimination. Blum's organization is relying on these precedents in their quest for a corporate follow-up to the Supreme Court's June decision, which was supported by the Court's 6-3 conservative majority. This ruling declared race-conscious student admissions policies used by Harvard University and the University of North Carolina as unlawful.

Blum's strategy faces its first significant test in court on Tuesday, as U.S. District Judge Thomas Thrash in Atlanta will hear arguments in Blum's lawsuit against the Fearless Fund, a venture capital firm. This firm operates a grant program designed to promote businesses owned by Black women.

With a looming Saturday deadline for this year's grant applications, Blum's organization is urging Judge Thrash, who was appointed by Democratic former President Bill Clinton, to issue a preliminary injunction quickly, preventing Fearless Fund from utilizing race-based criteria in its grant program.

Blum, who is white, emphasized, "All of our nation's civil rights laws - including the 1866 Civil Rights Act - enshrine the command that someone's race and ethnicity must never be used to help or harm them in public and private employment and contracting."

However, critics, such as Sarah Hinger, an attorney at the American Civil Liberties Union's Racial Justice Program, argue that Blum's lawsuits pose a threat to efforts to eliminate barriers to opportunity for individuals of all races in private sector employment.

Blum's legal actions have already prompted adjustments in some cases. Law firm Morrison & Foerster, another target of Blum, has appeared to modify its language regarding a diversity fellowship for law students, no longer specifying that it is exclusively open to Black, Hispanic, Native American, or LGBT applicants.

Fearless Fund, an Atlanta-based player in the $288 billion venture capital market, was established in 2019 by three prominent Black women and has invested nearly $27 million in businesses led by minority women, while also providing grants to Black women-owned businesses - a group that received less than 1% of all venture capital funding in 2022.