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The Multimillion-Dollar Cost of Anti-DEI Policies in the Workplace

By: Shaimaa El GhazaliDiversity Insights
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The Multimillion-Dollar Cost of Anti-DEI Policies in the Workplace

In recent years, organizations have increasingly recognized the importance of diversity, equity and inclusion (DEI). This shift wasn’t just a moral awakening, it was also a response to avoid the hefty costs associated with anti-DEI policies. However, the past year has seen a concerning trend of pushback against DEI initiatives, with some organizations scaling back their efforts. This reversal, often in response to new laws and pressures, can prove detrimental. In addition the immediate financial repercussions, such as legal settlements, organizations face indirect costs like reputation damage, boycotts, reduced productivity  and high employee turnover when they neglect DEI.

Here we will explore some of the largest lawsuits that highlight the costly impact of discrimination, bias, racism, sexism, and more.

Gender Discrimination Cases

Pinterest (2020)
Francoise Brougher, former Chief Operating Officer of Pinterest, filed a gender discrimination lawsuit after being sidelined and fired for raising concerns about sexist conduct and unfair remuneration. Her case, which highlighted issues of gender bias, resulted in a $22.5 million settlement by Pinterest. Brougher’s situation shed light on the broader gender discrimination issues within the tech industry. As part of the settlement, Brougher also donated $2.5 million to organizations supporting women and minorities in Silicon Valley​​.

Google v US Department of Labor (2021)
Google settled for over $3.8 million to resolve allegations of systemic compensation and hiring discrimination at their California and Washington State facilities. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs identified pay disparities affecting female software engineers and hiring rate differences disadvantaging female and Asian applicants. The settlement included back pay and interest to affected employees and job applicants. Additionally, Google agreed to enhance future compliance and review its current policies to ensure non-discrimination​​.

Race Discrimination Cases

Coca-Cola Company (2001)
Coca-Cola faced a lawsuit involving nearly 2,200 current and former Black American employees who alleged racially discriminatory business practices affecting their promotion and equal pay. The court approved a $192 million settlement, the largest race employment discrimination class action settlement in American history at the time. Subsequently, Coca-Cola became an advocate for equitable employment practices and established a court-appointed Task Force to oversee their progress.

EEOC v. Jacksonville Association of Firefighters, Local 122, IAFF (2019)
The Jacksonville Association of Fire Fighters, Local 122, IAFF, agreed to pay $4.9 million to settle a race discrimination lawsuit. The lawsuit alleged that the union advocated for an unlawful promotional process disproportionately impacting Black candidates. This case undoubtedly exemplifies the impact of anti-DEI policies and discriminatory practices in professional advancement and promotion​​.

Disability Discrimination Case

EEOC v. Verizon Communications Inc. (2011)
Verizon Communications settled a nationwide class disability discrimination lawsuit for $20 million, the largest disability discrimination settlement in a single lawsuit in EEOC history. Verizon was charged with violating the Americans With Disabilities Act (ADA) by refusing to make exceptions to its “no fault” attendance plans to accommodate employees with disabilities. The settlement required Verizon to revise its attendance and ADA policies, provide mandatory ADA training, and report all employee complaints of disability discrimination​​.

Age Discrimination Case

EEOC v. Texas Roadhouse (2017)
Texas Roadhouse, a national restaurant chain, agreed to pay $12 million to settle an EEOC age discrimination lawsuit. The lawsuit alleged that Texas Roadhouse engaged in a nationwide pattern of age discrimination by denying front-of-the-house positions to applicants aged 40 and older. The consent decree required Texas Roadhouse to change its hiring and recruiting practices, establish a diversity director, pay for a decree compliance monitor to ensure adherence to the Age Discrimination in Employment Act (ADEA), and increase its recruitment and hiring of older employees​​.

LGBTQ+ Discrimination Case

Harris Funeral Homes v. EEOC (2020)
In this landmark case, Aimee Stephens, a transgender funeral director, was awarded $250,000 after facing sex discrimination at Harris Funeral Homes. The Sixth Circuit Court of Appeals ruled the dismissal as unlawful discrimination based on her sex. This case, which reached the U.S. Supreme Court, resulted in a historic ruling in June 2020, confirming that federal sex discrimination laws protect transgender individuals. This ruling marks a significant moment for LGBTQ+ rights and underscores the financial and ethical implications of anti-DEI policies in the workplace.

Religion Discrimination Case

Abercrombie & Fitch (2015) 
The U.S. Supreme Court found Abercrombie & Fitch liable for violating civil rights law by refusing to hire Samantha Elauf, a Muslim woman, because she wore a hijab. The company was ordered to pay $25,670 in damages to Elauf and $18,983 in court costs. Additionally, Abercrombie & Fitch had to revise its “look” policy. This ruling set a precedent, clarifying that an employer could be liable under Title VII for decisions motivated by avoiding the need to accommodate a religious practice, even without direct knowledge of the need for accommodation.

Consequences of Anti-DEI Policies

These cases underline the costly consequences of anti-DEI policies in the workplace. Neglecting DEI not only leads to substantial financial losses in legal settlements but also damages an organization’s reputation and affects employee morale and productivity. Embracing DEI is not just a moral imperative but a business necessity to foster a fair, inclusive and productive workplace. This doesn’t have to be ambiguous – you can measure the ROI of DEI.

To help your organization foster an inclusive workplace, try out our Diversity Calendar. This valuable tool not only helps in respectful scheduling but also offers a wealth of DEI educational resources. By integrating our Diversity Calendar into your workplace, you can actively work towards preventing discrimination and promoting equality.

FAQs

What are the objections to DEI?
Critics may argue that DEI efforts can lead to reverse discrimination, prioritizing diversity over merit and qualifications. Others view DEI programs as potentially divisive, fostering a focus on differences rather than unity. However, proponents of DEI highlight its role in fostering inclusive environments that respect and value diverse perspectives, ultimately contributing to more equitable and innovative organizations.

What is the anti DEI law in Texas?
The anti-DEI law in Texas, known as Senate Bill 17, took effect on January 1, 2024. This legislation prohibits state-funded colleges and universities from maintaining diversity, equity, and inclusion offices and bars them from soliciting DEI statements from job candidates or mandating diversity training related to race, color, ethnicity, gender identity, or sexual orientation. The law’s impact is already prompting changes in DEI programs and staff roles within affected institutions, with some announcing closures of DEI offices or adjustments to comply with the new regulations​​.

What is opposition to DEI training?
Opposition to DEI training often arises from concerns about the content and approach of such programs. Critics may perceive DEI training as promoting a particular political or ideological agenda, infringing on personal beliefs and freedoms. Concerns are also raised about the effectiveness of these trainings, with some arguing that they can be counterproductive, inadvertently reinforcing stereotypes or creating resistance among participants. On the other hand, supporters assert that DEI training is crucial for building awareness, reducing biases, and creating more inclusive workplaces, which can enhance team collaboration and organizational success.

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