Florida’s top legal officer said the state will investigate Starbucks for its diversity, equity, and inclusion (DEI) practices.

Florida Attorney General Ashley Moody claims Starbucks’ DEI initiatives that are meant to address and prevent discrimination are unlawful employment practices that are becoming discriminatory themselves.

Moody filed a complaint with the Florida Commission on Human Relations, which she said would launch a “full investigation.” The decades-old commission is meant to enforce the Florida Civil Rights Act and address discrimination issues.

The case should be of significant interest to employers, as DEI programs are becoming increasingly scrutinized. Since the Supreme Court’s ruling that struck down affirmative action programs in college admissions, the standard has been broadly applied to DEI initiatives at organizations. Various legal challenges have followed, which heightens the focus for employers to ensure they are moving toward pay and opportunity equity in a legally compliant manner.

Achieving Workplace Equity While Maintaining Compliance

Striving to have a more equitable workplace as it relates to pay and opportunity is a worthwhile endeavor and far from a compliance risk. In fact, neglecting the equity of your workplace across those two paradigms is the far more riskier of the two options.

However, as the legal landscape evolves, even well-intentioned programs aimed at creating a more diverse and equitable workplace can go awry. This can happen when quota setting is part of your DEI initiatives. This can be exacerbated when pay incentives, particularly for executives, are tied to those quotas being met.

At the crux of the Starbucks case is the coffee chain’s stated aim: “annual inclusion and diversity goals of achieving BIPOC representation of at least 30 percent at all corporate levels and at least 40 percent of all retail and manufacturing roles by 2025.”

Executive bonuses were previously tied to this goal, but the company’s investors earlier this year in a non-binding vote approved a plan to drop executive bonuses correlated with DEI goals.

No matter how the Starbucks case turns out, there’s a clear impetus for employers to ensure their workplace equity efforts are compliant and defensible. Those that aren’t will no doubt be the subject of future scrutiny and potential lawsuits.

Action Items for Employers

Employers should audit their existing pay and opportunity equity processes to ensure they are legally compliant. One way in which they may not be is automatically using male as the reference class for gender and White as the reference class for race/ethnicity.

This approach assumes White males are advantaged relative to other demographic classes in employment outcomes (e.g., pay, hiring, promotion, and retention). While this is sometimes the case, it is not always the case. As our Executive Vice President of Pay Equity and Total Rewards Strategies and Solutions, Gail Greenfield, notes: While this approach may be reasonable when reporting enterprise-wide pay and opportunity equity results, it’s not the preferred approach when identifying and remediating disparities.

Instead, our recommendation is to take a neutral approach in looking for pay and opportunity disparities (i.e., any demographic class can be identified as having a disparity), thereby reducing the chance of missing any “reverse discrimination” risks.

For any jurisdiction-specific compliance analysis (e.g., Illinois Equal Pay Certificate), we recommend using the reference class required by the legislation.

Leverage Legally Compliant Software

Workplace equity software solutions support organizations in achieving pay and opportunity equity. However, an important part of your due diligence is ensuring that your software solution is legally compliant.

Trusaic’s pay equity software solution conducts a pay equity audit across your workforce at the intersection of gender, race/ethnicity, age, disability and more in one statistical regression analysis, taking a neutral approach in looking for pay disparities. This empowers you to address and prevent pay inequities in a legally compliant manner.

Additionally, our opportunity equity software ensures you are addressing equity concerns in your organization’s hiring, promotion, and retention processes in an unbiased manner.

Drawing from diverse global directives like the OFCCP, EEOC, EU pay transparency directive, and more, our platform ensures fairness and inclusivity throughout your talent lifecycle, irrespective of geographical boundaries or regulatory frameworks.

By leveraging the right workplace equity software solutions, you can help your organization achieve pay and opportunity equity in a legally compliant way with confidence.