TLDR:
- The Eleventh Circuit blocked a venture capital fund’s grant contest for Black women-owned businesses
- The contest was found to likely unlawfully discriminate based on race under Section 1981
The U.S. Court of Appeals for the Eleventh Circuit recently issued a ruling blocking a grant contest by a venture capital fund that exclusively benefited Black women-owned businesses. The contest was deemed discriminatory under Section 1981 and was challenged by the American Alliance for Equal Rights, resulting in a preliminary injunction granted by the Eleventh Circuit.
The case raises important legal questions around diversity, equity, and inclusion (DEI) initiatives, particularly those that exclude individuals based on race. The court’s decision highlights the ongoing scrutiny and legal risks associated with programs that exhibit explicit racial exclusions, even if the intention is to address historical racial discrimination.
The Eleventh Circuit’s ruling also sheds light on the importance of standing in such cases, with the majority holding that the Alliance had the right to bring claims on behalf of potential applicants who were unable to participate in the contest due to race-based exclusions. However, there was a dissenting opinion that questioned the standing of the Alliance and challenged the authenticity of the members’ interest in participating in the contest.
Overall, the Eleventh Circuit’s decision serves as a reminder of the legal complexities surrounding DEI programs and initiatives, underscoring the need for careful consideration of program design and implementation to ensure compliance with anti-discrimination laws.
