TAKEAWAYS
- Based on First Amendment concerns, the Eleventh Circuit has blocked enforcement of provisions in Florida’s Stop WOKE Act that would restrict mandatory trainings endorsing DEI concepts.
- The Second Circuit has rejected a nonprofit organization’s effort to enjoin a corporate fellowship program on the grounds that the organization lacked standing.
- The legal landscape around DEI initiatives is rapidly changing, as many challenges to DEI initiatives continue in courts and legislatures.
The first week of March 2024 saw two U.S. Courts of Appeals separately block efforts to restrict initiatives designed to promote diversity, equity, and inclusion (DEI). Although each court decision was grounded in provisions of the U.S. Constitution, one ruling rested on the First Amendment in affirming a preliminary injunction against an anti-DEI statute, while the other applied Article III standing principles to affirm dismissal of an advocacy group’s challenge to a corporate initiative designed to increase its pipeline of diverse employees.
Eleventh Circuit Affirms Preliminary Injunction against Florida’s Stop WOKE Act
On March 4, 2024, the U.S. Court of Appeals for the Eleventh Circuit rendered a decision in Honeyfund.com Inc. v. Governor, State of Fla., affirming a district court’s order blocking workplace restrictions mandated in the Individual Freedom Act, also known as the Stop the Wrongs to Our Kids and Employees (Stop WOKE Act), from going into effect.
Background and Legal Challenges to the Stop WOKE Act
As discussed in Pillsbury’s April 25, 2022, Client Alert, provisions in the Stop WOKE Act amended the Florida Civil Rights Act to, among other things, prohibit employers, associations, and certification organizations from mandating “training, instruction, or any other required activity that espouses, promotes, advances, inculcates, or compels” any of eight concepts that the Act defined as discriminatory. The restricted list includes concepts of white or male privilege and of unconscious bias relating to race, color, sex, or national origin. The Act also prohibits promoting the concepts of cultural competency or cultural humility as preferable to “racial colorblindness” in advancing the values of equity and inclusion. Discussion of the restricted concepts is permitted under the Act only if done “in an objective manner without endorsement of the concepts.”
Opponents of the Stop WOKE Act, including named plaintiff Honeyfund.com, Inc., a Florida-based company, filed First Amendment challenges in federal court ahead of the Act’s July 1, 2022, effective date. The plaintiffs argued that they regularly host mandatory staff trainings highlighting DEI concepts, that DEI was intrinsic to the workplace environment the plaintiffs sought to foster, and that enforcement of the Act would violate the companies’ First Amendment rights of free speech. The plaintiffs also argued that the provisions of the Act were unconstitutionally vague. The Federal District Court for the Northern District of Florida granted the plaintiffs’ motion for a preliminary injunction on August 18, 2022, blocking enforcement of those provisions of the Act, as described in Pillsbury’s August 22, 2024, Client Alert. The defendants appealed to the U.S. Court of Appeals for the Eleventh Circuit.
Appellate Court Opinion Describes the Stop WOKE Act as Unconstitutional
In unanimously affirming the preliminary injunction, the Court of Appeals held the Act “exceeds the bounds of the First Amendment,” explaining that “[b]y limiting its restrictions to a list of ideas designated as offensive, the Act targets speech based on its content. And by barring only speech that endorses any of those ideas, it penalizes certain viewpoints—the greatest First Amendment sin.”
While the Florida defendants argued that the regulation prohibited certain conduct (which government has broad authority to regulate) rather than speech, the Court rejected such a defense as a “losing constitutional strategy.” The Court noted that it would be impossible to enforce the Act with respect to mandatory training unless “enforcement authorities … examine the content of the message that is conveyed to know whether the law has been violated .… When the conduct regulated depends on—and cannot be separated from—the ideas communicated, a law is functionally a regulation of speech.”
Determining that “the message matters, [not] just the action” in distinguishing between lawful and prohibited trainings, the Court “reject[ed] this latest attempt to control speech by recharacterizing it as conduct.” The Eleventh Circuit emphasized “Florida may be exactly right about the nature of the ideas it targets,” but “the merits of these views will be decided in the clanging marketplace of ideas rather than a codebook or a courtroom …. No matter how controversial the ideas, allowing the government to set the terms of the debate is poison, not antidote.”
Second Circuit Affirms Dismissal of Race Discrimination Lawsuit against Minority Fellowship Program
Two days after the Honeyfund.com ruling, the U.S. Court of Appeals for the Second Circuit issued a decision in Do No Harm v. Pfizer, Inc., affirming the dismissal of a race discrimination challenge to a corporate fellowship program. The Second Circuit did not reach the merits of the underlying race discrimination claim, but instead held that the plaintiff, a nationwide membership organization, lacked Article III standing because it failed to identify a single injured member by name.
Background and Legal Challenges to Race-Conscious Efforts to Correct Underrepresentation of Minority Groups
The Do No Harm organization, a nonprofit advocacy group founded in 2022, with the stated goal of “combating the attack on our healthcare system from woke activists,” filed a lawsuit challenging Pfizer’s Breakthrough Fellowship Program. A stated purpose of the fellowship program was to “increase[e] the pipeline for Black/African American, Latino/Hispanic and Native Americans” interested in pursuing biopharmaceutical careers by offering paid summer internships, full-time employment with Pfizer, and paid scholarships to graduate education programs in areas relevant to a career with Pfizer.
Do No Harm claimed the fellowship unlawfully excluded white and Asian-American applicants, in violation of Section 1981 of the Civil Rights Act and various other laws, and sought a preliminary injunction barring Pfizer from selecting its 2023 Fellowship class. In support of its motion, Do No Harm submitted declarations from three unnamed members of the organization averring that they met all of the eligibility requirements for the fellowship, except that the members were either Asian or white. The district court dismissed Do No Harm’s lawsuit, holding that the organization lacked standing because it failed to identify any of its injured members by name.
Second Circuit Does Not Allow Lawsuit Resting on Anonymous Declarations to Proceed
On appeal, the Second Circuit affirmed. The Court held that, although an association may have standing to sue as the representative of its members, it must show that its members would otherwise have standing to sue in their own right, which includes that the individual members suffered a concrete and particularized injury that is “actual or imminent”, in accordance with the standing requirements under Article III of the U.S. Constitution. Where the claim relates to discriminatory eligibility criteria, a plaintiff need not submit a “futile” application but must “demonstrate that they are able and ready to apply” if the discriminatory policy is corrected. The Court cited three reasons why Do No Harm’s filing of only anonymous declarations was insufficient to meet the standing requirement:
- Disclosure to the court of harmed members’ real names demonstrates “the sincerity of the member’s interest in applying for a fellowship,” and that they “are not merely enabling the organization to lodge a hypothetical legal challenge.”
- In order to apply to the Fellowship, an applicant must disclose their name, so “a would-be applicant’s willingness to disclose their name―at least to the court―is an essential component of the ready-and-able showing.”
- An association cannot “rest its standing on anonymous member declarations when we would not allow those members, as individual parties, to proceed anonymously to the court in their own right.”
The Court noted that its reasoning did not extend to circumstances in which a court grants permission to proceed under a pseudonym to a plaintiff who has disclosed their name and identity under seal to the court.
The Court affirmed the dismissal of Do No Harm’s claims without prejudice (which permits Do No Harm to seek to bring its claims again).
Implications for Other Legal Challenges
Both First Amendment and standing issues are currently being considered by the Eleventh Circuit in another case involving DEI initiatives, American Alliance for Equal Rights v. Fearless Fund Management, LLC. (Fearless Fund). Fearless Fund is a lawsuit brought by the anti-DEI advocacy group American Alliance for Equal Rights (AAER) against a venture capital fund and its nonprofit charitable foundation, the Fearless Foundation, alleging that a grant and mentorship opportunity contest held by the foundation was impermissible because only Black female business-owners were eligible to win a grant. As with Do No Harm’s complaint against Pfizer, AAER’s motion for a preliminary injunction against the contest was supported by declarations from unnamed members; AAER’s anonymous members attested that they were ready and able to apply for grants but were not Black.
In September 2023, the U.S. District Court for the Northern District of Georgia denied an injunction against the grant contest, finding that the grant program could qualify as protected First Amendment expression. AAER appealed that decision, and the Eleventh Circuit granted an injunction pending appeal, putting the contest on hold.
In arguments to the Eleventh Circuit, Fearless Fund’s attorneys argued not only that cause-oriented charitable donation programs are protected under the First Amendment, but also that AAER lacked Article III standing because it had not identified any named members who were injured by the contest’s eligibility rules. As of the date of this client alert, the Eleventh Circuit has not yet issued a ruling.
Additionally, as of February 29, 2024, more than 30 states have introduced or passed bills during their current legislative sessions that are aimed at restricting or regulating DEI initiatives. At least some of these measures raise First Amendment issues similar to the Stop WOKE Act.
Practical Considerations
DEI initiatives continue to attract both vigorous support and vehement detractors. Businesses and associations should anticipate further legislative and litigation efforts designed to curtail promotion of DEI programs. As described in this August 18, 2023, Client Alert, there are approaches to promoting diversity in workplaces, associations, and professional fields that minimize the risk of legal challenges through adoption of strategies other than race-conscious selection decisions. Civil rights advocacy groups, such as the NAACP Legal Defense Fund, have also published guidance on lawful ways to promote equal opportunity and enhance diversity. As these issues play out in the courts, businesses and associations will gain more clarity as to the scope of permissible DEI efforts. In the meantime, employers and nonprofit organizations should consult legal counsel for advice about any DEI initiatives they have undertaken or plan to undertake.
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