When Diversity Goes Awry - American Society of Employers - Anthony Kaylin

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When Diversity Goes Awry

Diversity, equity, and inclusion (DEI) has been a hot topic the past few years.  The diversity and inclusion part, not as much, but the equity aspect quite a bit.  The Harvard case was called an affirmative action case, but it had nothing to do with affirmative action.  It was a case about equity and access to Harvard.  The approach taken was a quota system, which is illegal under all laws.  Diversity is not about quotas, it’s about working together to provide a pathways to open doors.  Yet in the employment world, it is always about the most qualified, not who misses out and should be “compensated for that.”

In a case before the 4th Circuit Court of Appeals, it upheld the firing of a white male employee as an illegal attempt to promote equity within the Novant Health system. David Duvall is a white male who worked at Novant Health as its communications and marketing head, who had excellent performance reviews and whose team earned marketing and public relations awards.  In 2018 he was terminated, and no reason was given.  A black woman was eventually hired to take over his position.

In 2015 Novant Health hired a Diversity and Inclusion Senior Vice President to develop a Diversity and Inclusion Strategic Plan (the "D&I Plan"), which included the express goal of adding additional dimensions of diversity to executive and senior leadership teams. The Plan was overseen and implemented by a Diversity and Inclusion Executive Council (the "D&I Council").  The D&I plan showed that women were less representative in the higher levels of management and especially blacks.

Duvall sued that he was being discriminated against with his firing because he was a white male.  

At trial Duval was able to show that all the finalists for his job when he was terminated were black women and that his supervisor was replacing other white males with black employees.  Further, Duval showed that in October 2018, the D&I stated its goal was to meet diversity "targets," which it defined as being set by the organization. The evidence at trial also reflected that Novant Health adopted a financial incentive plan that tied executives' bonuses to achieving specific diversity goals by 2021. 

The Jury awarded him damages, and the 4th Circuit Court upheld the verdict and damages, with a proviso of limiting damages to $3.4 million for lost wages (the punitive aspect of the award was $10.3 million and was overruled).

The Court reviewed the record and cited the evidence that supported Duvall’s claim.  Novant Health was in the middle of a "widescale D&I initiative which sought to embed diversity and inclusion throughout the company." The evidence showed that Novant Health sought to accomplish its D&I plan by benchmarking its D&I levels and working to achieve its "targets," efforts the employer supported through the use of incentives such as executive bonus tied to these diversity targets.  Due to the fact that the supervisor replaced Duvall and others with black women, it did appear to a jury that discrimination occurred.  Given the whole set of evidence, the court ruled that a jury could believe that Novant Health discriminated against Duvall by firing him and replacing him the way it did.

The takeaway for HR from this case is that diversity is about efforts made by the organization to build pipelines and programs to find and develop those who otherwise would not have access to such opportunities when they arise, whether it’s a leadership position or an entry level position into the organization.  It is also about diversity of differences and celebrations of such as well as diversity of thought.

Creating goals out of the blue, such as 30% of all director level jobs need to be minorities, is in effect, a quota system in making, especially when financial incentives are provided.   Further, with a dynamic workforce, the percentage goal is generally a moving target and unlikely to be reached without potential discriminatory actions.

 

Source: Duval v. Novant Health, Inc., No. 22-2142 (4th Circuit Court of Appeals, 3/12/24), Seyfarth 3/26/24, Reuters 3/12/24, New York Times 10/28/21

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