September 27, 2024
How Stephen Miller and the anti-DEI movement are going after small businesses
At Fast Company’s Innovation Festival, panelists discussed the legal strategy being used by anti-DEI conservatives, including Stephen Miller.
BY AJ Hess
On July 3, 2023, the Supreme Court overturned affirmative action, prohibiting U.S. colleges and universities from considering an applicant’s race during the admissions process.
Stephen Miller, former Trump White House adviser and president of America First Legal, wasted no time threatening to sue colleges and universities if they did not comply.
At the time of the landmark ruling, many experts warned that the decision would reduce the diversity of college campuses and that it would ?set the stage for attacks on corporate DEI programs. Indeed, both of these predictions have come to fruition. Numerous schools, including Amherst College and Tufts University to MIT and UNC, have enrolled significantly fewer Black students. And conservatives, including Miller, have gone on to file numerous lawsuits against so-called “woke” companies with DEI-related initiatives.
In a panel at Fast Company’s Innovation Festival last week, staff writer Pavithra Mohan explored this war on “woke” in the workplace, which conservatives like Miller have waged.
“They’ve set their sights on private business,” said Neal Katyal, former acting solicitor general. “It used to be a central libertarian Republican tenant that businesses should be able to do what they want. But when businesses didn’t do what Stephen Miller wanted, he decided to sue them.”
Katyal, now a partner at Hogan Lovells, recently represented Hello Alice, an online platform for entrepreneurs, which was sued by Miller’s organization. Miller argued that Hello Alice’s administration of ten $25,000 grants to Black-owned businesses, in partnership with the insurance giant Progressive, amounted to racial discrimination.
“It was the shock of a lifetime to get what was an email saying that we were being sued for programs that build the economy and create jobs,” said Elizabeth Gore, cofounder and president of Hello Alice, who was also on the panel. Gore stressed that small businesses employ the majority of working Americans and that supporting small business owners is not a polarizing topic in most local communities.
“We’ve got Republicans, we’ve got Democrats, and we’re headquartered in Houston, Texas,” said Gore. “The vast majority of small business owners support each other. They support diversity, and they want everyone to succeed, including, I would say, centrist Republicans.”
In May 2024, a Judge ruled against Miller in favor of Hello Alice.
But while Hello Alice may have won their case, this has not been the experience of other organizations facing such legal attacks. For instance, Fearless Fund, an Atlanta-based venture capital firm, was forced to shut down a grant program that awarded funds to small businesses run by Black women as part of a settlement with conservative activist Edward Blum’s anti-affirmative action group the American Alliance for Equal Rights.
Mohan pointed out that many organizations, such as Fearless Fund, do not have the funds to fend off expensive lawsuits waged by the likes of Blum and Miller. As a result, many have chosen to abandon their DEI-related efforts and avoid being targeted by such groups—or to simply settle out of court.
“That’s the business model for Stephen Miller, which is to go around the country, threaten to sue these small businesses or other entities, and get them to just unilaterally disarm. And business after business is doing that,” said Katyal. “By the way, it’s not just small businesses. I advise some of the largest companies in the world on this stuff, and some of them have thrown in the towel because they’re afraid.”
This intimidation technique, Katyal suggested, is also part of the anti-DEI movement’s strategy to file class action lawsuits against young startups.
“Some of these Steven Miller-types are attacking companies where they know that the companies are at a vulnerable point in their funding,” he said. “They may be seeking a venture capital round. They may be seeking equity loans or something like that. And many lenders have rules like, you can’t have a class-action lawsuit coming against you when you’re seeking funding. So Stephen Miller styles all of these as class actions.”
Katyal continued, “And so even though they’re totally bogus class actions—that would never, ever in a million years meet the Supreme Court’s thresholds for what a viable class action suit is—they’ve now got to go to court and say it’s not a viable class action that takes years to get undone. And in the interim, massive harm is happening.”
The anti-DEI movement’s next target, according to Katyal? Women.
“I’m very worried that the next wave of litigation is going to be around the grants that want to help women-owned businesses,” he said.
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