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 42 U.S.C. Section 1981
The U.S. Court of Appeals for the Eleventh Circuit ruled in the case brought by the American Alliance for Equal Rights that the Fearless Fund’s grant contest was likely to violate Section 1981. The contest, which provided funding and benefits to black women-owned businesses, excluded non-Black applicants based on their race. The ruling highlights the ongoing legal scrutiny of programs that exclude certain groups based on race, even if the intention is to address historical race discrimination.
The Eleventh Circuit’s decision also delved into the contest’s standing, its exclusionary terms, and the First Amendment protection. The majority found that the Alliance had standing to bring the claims and that the contest did not qualify as a remedial measure exempted from Section 1981. Additionally, the ruling concluded that the contest was not protected expressive conduct under the First Amendment. The dissenting opinion raised concerns about standing, comparing the situation to sports “flopping,” where players manipulate the referee to their team’s advantage.
Overall, the ruling sheds light on the legal skepticism surrounding programs that exclude individuals based on race, regardless of the organization’s mission. It underscores the importance of ensuring that Diversity, Equity, and Inclusion (DEI) programs do not discriminate based on race and raises questions about what constitutes sufficient standing in such cases.
