Activist challenges corporate diversity programs with Civil War-era law

A conservative activist who successfully challenged the use of race in college admissions is now targeting the diversity initiatives of several U.S. corporations, using a law that was originally intended to protect the rights of formerly enslaved Black people.

Blum’s lawsuits

Edward Blum, the founder of the American Alliance for Equal Rights, has filed three lawsuits since August, accusing a venture capital fund and two law firms of violating Section 1981 of the 1866 Civil Rights Act. This law guarantees all people the same right to make and enforce contracts “as is enjoyed by white citizens.”

Activist challenges corporate diversity programs with Civil War-era law
Activist challenges corporate diversity programs with Civil War-era law

Blum’s lawsuits claim that the defendants’ grant and fellowship programs, which are designed to help Black, Hispanic and other underrepresented minority groups gain more career opportunities, discriminate against white people and violate the law.

Blum, who is white, is also the president of Students for Fair Admissions, another group that successfully challenged the race-conscious admissions policies of Harvard University and the University of North Carolina in June. The U.S. Supreme Court, with a 6-3 conservative majority, ruled in favor of Blum’s group and declared that such policies were unlawful.

Fearless Fund case

Blum’s strategy faces its first major test on Tuesday, when U.S. District Judge Thomas Thrash in Atlanta hears arguments in his lawsuit against Fearless Fund, a venture capital firm that invests in businesses led by minority women.

Blum’s group is seeking a preliminary injunction to stop Fearless Fund from using race-based criteria for its grant program, which offers up to $25,000 to Black women entrepreneurs. The deadline for this year’s grant applications is Saturday.

Fearless Fund, which was launched in 2019 by three prominent Black women – actress Keshia Knight Pulliam, entrepreneur Arian Simone and corporate executive Ayana Parsons – has invested nearly $27 million in businesses led by minority women.

Fearless Fund argues that its grant program does not violate Section 1981 because it does not exclude anyone from applying or receiving funding based on race. It also says that its program serves a compelling interest in promoting diversity and inclusion in the venture capital industry, which is dominated by white men.

ACLU’s response

Sarah Hinger, a lawyer at the American Civil Liberties Union’s Racial Justice Program, said Blum’s lawsuits pose a threat to efforts to remove barriers to opportunity for people of all races in private sector jobs.

“This is an effort to scare similar employers and investors away from what is in some ways a nascent effort to address inequities,” Hinger said.

Hinger also said that Blum’s use of Section 1981 is ironic and perverse, given that the law was enacted after the Civil War to protect the rights of formerly enslaved Black people from racial discrimination in contracts.

“Section 1981 was meant to be a tool for racial justice, not a weapon for racial backlash,” she said.

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