Staying the Course on Inclusion: DEI in a Complex Legal Landscape with Michelle Phillips

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Michelle Phillips:

The point that we're in now is this tremendous struggle and turmoil going on in the country, and there are those who are advocating for change, there are those who are advocating for equity, for belonging, for inclusion, and then there are those who want to reverse things and go back to pre-Brown versus Board of Education, back to Plessy versus Ferguson, 1899, and they are organized and they are relentless. We have seen in the last month or so, or two months or so, a series of court filings and they have sued Hershey's, they have sued Kellogg's, they've sued Target. The net effect of that, we can talk about whether those are likely to be successful, but the net effect of that is it's causing people to pause in their DEI efforts.

Doug Foresta:

The Will to Change is hosted by Jennifer Brown. Jennifer is an award-winning entrepreneur, dynamic speaker, bestselling author, and leadership expert on how organizations must evolve their cultures towards a new, more inclusive workplace reality. She's a passionate inclusion and equity advocate committed to helping leaders foster healthier and therefore more productive workplaces, ultimately driving innovation and business results. Informed by nearly two decades of consulting to Fortune 500 companies, she and her team advise top companies on building cultures of belonging in times of great upheaval and uncertainty. And now, onto the episode.

Hello and welcome back to The Will to Change. This is Doug Foresta. This episode features a conversation with Michelle Phillips, principal at the White Plains New York office of Jackson Lewis PC. Michelle discusses major legal developments that impact DEI efforts in the workplace, including how the Supreme Court's recent ruling limiting affirmative action in college admissions is causing companies to pull back on their DEI programs and she also shares insights about how employers can navigate this complex legal landscape while still expanding diversity pipelines and addressing unconscious bias. All this and more, and now onto the conversation.

Jennifer Brown:

Michelle Phillips, welcome back to The Will to Change.

Michelle Phillips:

Nice to be here. Thanks for inviting me, Jen.

Jennifer Brown:

Well, for long-term Will to Change listeners, you are familiar with Michelle's work at Jackson Lewis and she is an incredible wealth of knowledge on the legal landscape, particularly how it's impacting our DEI world, and you are a fearless, tireless advocate, someone in the LGBTQ plus community. So we have multiple layers to our friendship and collaboration that I'm so grateful for, but I always check in with you because as soon as I think I have a handle on what's happening in the legal world and the suits that are being brought against, for example, employers and academic institutions, things just get even more intense.

We're sitting here in late August 2023, and I know last time we checked in was a couple months ago, so I wondered if you could give us some background on what's occurred in the last two or three months that matters to employers and help us parse through what to make of these actions. How substantive are they? What needs to be adjusted as a result, if anything, in our strategies? What are you advising your clients? Because I know that you advise a lot of companies and leaders, and individuals as well, about how to navigate this moment and not lose momentum on all the initiatives that you and I both believe, I know, are so important to creating a workplace where we all feel comfortable and represented and where we feel like we can thrive, which we're a long way from. So let me just tee that up to you and see where you'd like to go with it.

Michelle Phillips:

Yes, there's a lot to unpack there, so thank you. I think it's a rough time. Let's just acknowledge we're at a time where there was this monumental, unfortunate series of events beginning with George Floyd and many others, Breonna Taylor and many other people, but for some reason Floyd is like a touch point for a lot of organizations and companies. People talk about being a reckoning and a time of a change in the culture of our country.

So in addition to that event, right around that time, you also had the Starbucks case and you also had the Central Park birder case, all culminating at around the same time. All three of these different situations, the Starbucks situation basically where there was two customers or people of color that weren't buying anything and the white manager calls the police on them, and then of course Starbucks reacts to that and all of a sudden closes all the Starbucks over Memorial weekend and does this DEI training and then everything's resolved, right? No, but out of that, there were a number of lawsuits.

Also, the Central Park birder case, similar, racism. The issue is she's walking her dog off leash and the birder, Christian Cooper says, "Ma'am, could you just put your dog on a leash?" She gets indignant and she says, "I'm going to call the cops on you." He's recording it, not because he's thinking that this is going to be a pivotal racist moment, he's recording it because a birder and he wants to document that someone's not following the rules in the bramble in Central Park.

So those three events occur and a lot of companies react to that in a good way. For the first time, we start to see big budgets around diversity, equity, inclusion, and belonging, lots of training. I don't want to walk through the whole history, but I think it's an important backdrop to what has occurred and I think it made companies bold. They made bold moves, they were courageous. They started to say, "Look, we need to actually take measures to effectuate change in the workplace. Whatever we've been doing isn't enough. We're seeing it statistically in our hiring, our promotion practices, where marginalized communities and underrepresented groups are not being given adequate tools to thrive, mentorship, succession planning, all of these different tools that other people have."

So after that occurs and now there really is money being placed in this area, we went through the Trump years and there was this anti-DEI training federal statute, and then that was enjoined. Then more recently, in Florida last year, March of 2022, Governor DeSantis basically modeled the Anti-Woke Act after what former President Trump had done. So it's not just in the past, it's in the present, and he basically said, "You can't do anything that's going to make people uncomfortable." That's the way I refer to the legislation. So if it's going to make people feel guilty or feeling that they're pressured, or if we make DEI trainings mandatory, or if we discipline people because they don't go, or if we impact people's pay because they don't take DEI efforts seriously.

There's just been this tremendous backdrop, this tremendous conservative movement, what I refer to as Newton's Law, so for every action there's an equal and opposite reaction, so we're in the reaction stage now, and it's not just limited to the former president or the governor of Florida. There's a number of very conservative organizations out there that have been strategic and careful about pushing these anti-DEI initiatives. So that's what brings us to the present, and one of the things that recently happened in the last couple of months since we've talked is that there was a Supreme Court decision, and everyone was waiting for it and everyone knew it wasn't going to be good, but then it came out on June 29th. This is the Harvard and UNC case, and the holding of that case is that you can't use race in admissions, that the use of race as a factor, even a plus factor, can't be a tipping, there's all different ways of explaining it, it violates the equal protection clause.

They said in the case that Gruder was not overturned, but effectively it was overturned. So if you go just back historically, there was Plessy versus Ferguson and it said separate is equal. It doesn't matter that the facilities are broken or that one is only for whites and others are for non-whites and they're completely different facilities, that was what was allowed in 1899. In 1954, there was Brown versus Board of Education and it said separate is inherently unequal. Just by separating people, that is unequal. So after Brown, then there was Bakke, and Bakke, it was a medical school and they set aside 16 slots for medical students, I don't know if it was race, underrepresented, but it was definitely you had to be non-white for those 16 of 100 slots, and that was upheld. Then there was Gruder, and Gruder said, [inaudible 00:09:37] to be narrowly tailored, it has to be compelling.

So now the court's saying, "We're not overruling Gruder," but as I said, effectively they are. So you can't now, in admissions, you can't take race into account. The only carve out that they allowed for in that decision is they said that universities can consider how a student's unique ability to contribute to the university or their experience as an individual, not that it's based on race, but it would be a backdoor way, for example, in a student's essay, to talk about race and what they've overcome or struggled or any personal ways in which they've... what makes them a good candidate for Harvard or UNC.

So that's the case, and since the case, what we've seen, well, first of all, the case, and I'm focused on workplace, so it's not about in the education context, so we say that the case did not impact employers. The case dealt with Title VI and the case dealt with Equal Protection Act and it dealt with it in the education context. That's what we said, but what we're seeing is that it's had a tremendous impact in the workplace. So even though it didn't just address Title VII, which is the federal employment statute primarily dealing with discrimination based on race or color, national origin, gender, or religion, the point that we're in now is this tremendous struggle and turmoil going on in the country. There are those who are advocating for change, there are those who are advocating for equity, for belonging, for inclusion, and then there are those who want to reverse things and go back to pre-Brown versus Board of Education, back to Plessy versus Ferguson, 1899. They are organized and they are relentless.

We have seen in the last month or so, or two months or so, since the Harvard and UNC cases, a series of court filings by primarily one conservative group, but a number of conservative groups, and they have sued Hershey's, they have sued Kellogg's, they've sued Target, they've sued law firms, they're suing all over the place. The net effect of that, we can talk about whether those are likely to be successful, but the net effect of that is it's causing people to pause in their DEI efforts.

Employers are afraid that they're going to be sued, that whether they... Now, there are some employers, bold, courageous employers that are saying, "We don't care, we'll take it, we'll take the lawsuit." But for many employers, they're skittish. So for example, before a bold move would be to report on whether it's in the company's values, whether it's in the ESG report, whether it's in the annual report, stockholder meeting, and the board of... Well, in all of these different places, companies were bragging about their efforts, "By 2025, we want to be 50% gender equal. We want to be 30% based on race in upper management," all of these different numbers. That very bragging, and I don't mean it in a bad or... I would brag about it too. All of that is now coming back to bite them because that looks like you're taking race or gender or another protected group into account, and that's specifically what Title VII says you cannot do.

Jennifer Brown:

Well, and then the other side is, hey, by the way, these targets you announced, we didn't meet them. You didn't mean it, you didn't meet those. So the question is, companies are worried about reverse discrimination and then they're worried about actual discrimination, and if you abandon programs that address the latter, you're exposed to the risk of lawsuits from underrepresented groups. So there's this vice of which case would you rather fight? I wonder, I know it's a balancing act, but so far the bigger concern, it seems to me, you tell me if I'm wrong, is the risk of lawsuits from underrepresented groups. There's just more success, more awards, more damage. I don't know, what is the sort of metric that tells you that those are still the bigger risk, but is the proportion or the balance of these shifting?

Michelle Phillips:

Well, it seems they're getting a lot of press, the cases of the last month. I mean, if you looked at actual numbers, there's no question that there are many more traditional race, gender, sexual orientation, gender identity, disability, age cases being filed. I mean, just to give you a sense of the numbers, I mean there's 67,000 discrimination complaints that were filed with the EEOC, I think it was in 2022, which is actually a low number. It used to be up to 100,000, so the numbers actually decreased, mostly because of COVID, and I think that the numbers just haven't... It's still a lot. So if you're talking about 30 lawsuits being filed in the last month, that doesn't even mildly compare. They just get a lot of press because people are concerned that these seem like frivolous lawsuits. That's how it feels.

I mean, for example, the lawsuit against Target, and there's also PR disasters and reputational and the Anheuser-Busch, and so there's a lot going on, but just even the Target suit, it's all about there's this shareholder and they buy a small amount of stock, I mean less than 50,000 in stock, and they're asserting a claim on behalf of all... Target's a multi-multi-billion dollar corporation. So someone who has less than 50,000 is now trying to impact change on Target because they tried to do the right thing by having some Pride merchandise in the month of June? So that lawsuit doesn't seem like it's going to survive. It doesn't even meet the minimum elements for a securities fraud case. He hasn't asserted how he bought the stock fraudulently. He hasn't asserted a representation that was made to him at the time he bought the stock that he relied on to his detriment that caused a loss.

So it's a strict standard, but the case is filed and that's what people read. Then Target ends up taking back some of its merchandise, and for the safety of the staff. So it's a messy situation, but just to bring it round, 100%, the majority of the discrimination cases filed are the traditional forms of discrimination. Jen, you alluded to another concern, which is like the Wells Fargo case, which is the issue of you tout that you have these DEI efforts, but then you're not actually living up to it, which it turns out was not really the case in the Wells Fargo case. It was one small group, it wasn't universal, and it was a few instances. That's not going to be enough in a large organization. Similar to the target analogy, you're not going to hold a large organizational responsible because in one division there was some evidence, potentially, of sham interviews. That doesn't cause into question all of Wells Fargo's DEI efforts.

Jennifer Brown:

Yeah, so there's a playbook. I mean, do any of these cases concern you or catch your attention in terms of what is progressing and what does have legs and what is a playbook that seems to have potential? What do you think is going to remain if all of this is sort of beginning to ramp up and we're going to see more and more? What's going to stick, and if you had to predict, why? I know what I hear from anecdotally is people are changing the names of efforts and training programs, and even the Office of Diversity is going by another name, and they're removing keywords. So I see some of that going on, the attempts to, I don't know if it's camouflage or rebrand or just sort of keep your head down.

Michelle Phillips:

Yeah, I think it's like be more stealth a little bit. So don't stop the fight, just be more strategic and careful about it. Don't talk about quotas. You could talk about aspirational goals. Always make sure you hire the best qualified candidates and you promote the best qualified candidates, and you can always increase the diversity pipeline. You can always have mentorship and succession planning and have robust ERGs that help expand the pipeline and bring awareness to companies about maybe unconscious bias, micro-inequities, microaggressions, micro-assaults. All of that's really good and really important, but be careful about bragging rights, because when you're... It's interesting, I was with a client yesterday and they're like, "Well, we want to collect this data with our applicants and we want to see how we're doing based on race and gender and sexual orientation and gender identity." I'm like, "That's really great, and that's going to be evidence against you in the future in a lawsuit where either someone says you're not doing enough or you're not doing it the right way. You basically have made out the plaintiff's case by collecting this data."

Jennifer Brown:

Oh my gosh.

Michelle Phillips:

They were like, "Oh, we didn't think of that." I'm like, "Yeah, so think about that."

Jennifer Brown:

So then do you just ballpark it? Do you-

Michelle Phillips:

Well, you can do anecdotals.

Jennifer Brown:

Anecdotally?

Michelle Phillips:

You can look in, you can drill down, you could do climate surveys, assessments. You could do it under privilege, under attorney-client privileges, [inaudible 00:20:31] way to kind of try and still do what you need to do. I think when I contrast these two cases that I referenced, the Central Park case with Christian Cooper, the Karen Case, I talk about that a lot in training because I think it's interesting that she was walking her dog at lunchtime. So she wasn't at work, she wasn't engaged in work, she wasn't with anyone from work, and yet her actions became a touch point, and her actions went viral and she was terminated for engaging in a racist act.

Then she sued the company saying that, as a white woman, that she was treated differently. In other words, they made a bigger deal out of it because she was white. The company said, "No, we would've taken that action towards anyone who engaged in a racist act, regardless of what their race is. We have company values and our values are you can't engage in racism," and they won on that basis. So I think that's important. I think there's lessons in there for employers.

The case that scares me a little bit is the Starbucks case. In that case, it was the regional manager. This was, again, the customers going into the store in Philly, the cops are called, and the regional manager is fired. She says, again, "I was a scapegoat and I was the regional manager." I'm not really sure because I didn't follow it very closely because I was surprised when the verdict came in and she got a $25 million verdict and then another $2 million in front pay, and then another 2 million... By the time you're done, you're close to $30 million. That concerns me. I think it's just, again, about being careful when you're making... I think not so much for the employer, but for the managers on the front line, don't make decisions like that without checking with your superiors, without checking with in-house counsel and other counsel, and don't let yourself wind up in a situation that probably could have been avoided had there been some more strategic thinking around that.

Jennifer Brown:

That woman was a white woman, correct?

Michelle Phillips:

Yeah, I think she had the name Phillips, oddly enough, her last name was the same as mine. I have the distinct [inaudible 00:23:07].

Jennifer Brown:

Easy to remember.

Michelle Phillips:

Jack Phillips was the plaintiff in the Masterpiece cake, and I think Shannon Philips. Whatever reason, my name is connected, but not-

Jennifer Brown:

You're in the right or wrong place. I'm not sure which.

Michelle Phillips:

Wrong, yeah. The name, that is.

Jennifer Brown:

I know. By the way, Chris Cooper has a new show, which I just love.

Michelle Phillips:

Love it.

Jennifer Brown:

What a wonderful person for all of us to know now, and more fully. What a nice silver lining to a really unfortunate situation. He seems like a really kind person.

Michelle Phillips:

Yeah, he came out with a book, and this incident is a very small part. He's not playing this.

Jennifer Brown:

Right, not at all.

Michelle Phillips:

Which he could be, but he just [inaudible 00:23:51] to live his life fully and this is just something that happened. Unfortunate, of course, but not something that he is focused on at all.

Jennifer Brown:

Wow. Well, that's ending on a little bit of a light note in a heavy time. Well, Michelle, thank you for joining me and giving us context. I always learn so much from you. For those of you who are listening, these cases might be worth looking up and just educating yourself about how they ended up and what the implications are, and just keeping an eye on what's bubbling up. We didn't even talk really about transgender and anti-trans cases and bills and things that are going on, but all of that is, I know, continuing to accelerate. So really, it's approving time for employers, like you said, who are ready to go the distance and really holding the line on those values, and I love that you gave an example of when it went in their favor to do so.

We will remember this time, again, as if we didn't go through enough in the last couple of years, again, to see the brands, the companies, the employers that really think these things through and figure out ways to continue to do the right thing by the workforce, which is to prepare the company for the future and to thrive in the future. There's really no way around the engagement with a diversifying workforce, customer base, shareholder base. I mean, it is the demographic right answer and the buying power goes along with those demographics, and this is capitalism.

Michelle Phillips:

There's just one thing I wanted to say on the transgender front. Again, a lot of the gender-affirming care cases relate to minors and whether you tell the parents and whether gender-affirming care is going to be upheld or not, but I think the one thing I want to say about the workplace is gender identity, sexual orientation are protected both under the Bostic decision, under the EOCs guidance, and under OSHA.

So as disheartening as it is with all these bills that are being passed, at least currently, with regards to the workplace, don't despair based on the current cases. You still should feel comfortable coming out, you still should feel that you can go to human resources, to your ERGs, to come out in a way that is respectful. Because it's hard to cut through all the cases that are coming out now and all the legislation that's coming out now and it's easy to feel like maybe you want to go back in the closet and hide, but don't do that.

Jennifer Brown:

Thank you for sharing that. That's so important, Michelle, and you're such an important voice for the community, and you've been awarded as such, and I've supported all of the awards you've gotten because-

Michelle Phillips:

Thank you.

Jennifer Brown:

...you really are such a treasure to us in understanding what we need to be concerned about. God knows we need to manage our energy and the overwhelm of these moments and the inundation of hostile news to our community. But I love that you just said there are protect ions in place. It's worth doing, obviously, but still worth doing, maybe more worth doing than ever.

Michelle Phillips:

Sure, yes.

Jennifer Brown:

Yeah. All right, thank you so much for joining me today.

Michelle Phillips:

Thank you, thank you.

Jennifer Brown:

Hi, this is Jennifer. Did you know that we offer a full transcript of every podcast episode on my website over at JenniferBrownSpeaks.com? You can also subscribe so that you get notified every time a new episode goes live. Head over there now to read my latest thoughts on diversity, inclusion, and the future of work, and discover how we can all be champions of change by bringing our collective voices together and standing up for ourselves and each other.

Doug Foresta:

You've been listening to The Will to Change, Uncovering True Stories of Diversity and Inclusion with Jennifer Brown. If you've enjoyed the episode, please subscribe to the podcast on iTunes. To learn more about Jennifer Brown, visit JenniferBrownSpeaks.com. Thank you for listening, and we'll be back next time with a new episode.