The heightened publicity of several high-profile incidents of police brutality against people of color has shined an uncomfortable spotlight on institutional racism and its negative impact on the lives of people of color, including in the employment context. As a result, many companies are making diversity and inclusion not only a top priority but also a business imperative.

Diversity Commitments and Their Consequences

Although corporate diversity initiatives take on many forms, most aim to increase opportunity for minorities and women. Diversity on boards can be achieved simply by taking race and gender into account at the time of selection. However, the same is not true in the employment context. Employment discrimination laws protect Caucasian and male employees and applicants from discrimination to the same extent as minorities and women. As a result, well-intentioned efforts to promote diversity in the workforce may expose employers to liability for reverse discrimination. For example, the Department of Labor's Office of Federal Contractor Compliance Programs recently made inquiries of at least two Fortune 500 companies that publicly pledged to double their Black leadership, citing concerns that the companies' potential use of "quotas" violated antidiscrimination obligations.

Companies also are seeing fallout when promised commitments to diversity and inclusion fail to achieve success. More than 15 shareholder derivative lawsuits have been filed in federal court seeking to hold directors and officers of major corporations accountable for allegedly misleading investors when making public commitments to improve diversity and inclusion. While some of these claims have been dismissed, others have survived dismissal and at least three companies have agreed to settlements valued at more than $90 million.