Coca-Cola receives warning over its attempt to impose racial quotas

In March, I wrote about the demand by Coca-Cola’s then-general counsel that law firms representing the company engage in racial discrimination. In a letter to these firms, Coke demanded, among other things, that on Coca-Cola matters they “commit that at least 30% of each of billed associate and partner time will be from diverse attorneys, and of such amounts at least half will be from Black attorneys.”

I argued that, if carried through, Coke’s insistence that its law firms assign work based on a racial quota would be unlawful. Both the company and the officers responsible for the policy would be vulnerable, I submitted, to a successful lawsuit under Section 1981 of the Civil Rights Act of 1866. Punitive damages can be awarded under this statute in appropriate cases.

Now, the Project for Fair Representation has written a letter to Coke’s new general counsel advising her of the illegality of its quota program for outside counsel. The letter is from C. Boyden Gray, a distinguished attorney who served as White House Counsel under George H.W. Bush.

The letter states, in key part:

Coca Cola’s stated goal is that the legal teams it hires “be representative of the population it serves,” and the policy’s minimum racial quotas therefore roughly track the racial distribution of the American population at large, rather than the labor market for attorneys. Thus, for example, the letter requires that at least 15% of time be billed by black attorneys. Blacks make up approximately 13.4% of the U.S. population, but only 5.9% of attorneys. . . .

In adopting this new policy, Coke appears to be following the view of “anti-racist” activist Ibram X. Kendi that justice requires proportional representation in all spheres of life and that the “only remedy to racist discrimination is antiracist discrimination. The only remedy to past discrimination is present discrimination. . . .And in order to treat some persons equally, we must treat them differently.”

Such a policy of discrimination is illegal. Since the Civil Rights Act of 1866 (codified at 42 U.S.C. 1981), federal law has prohibited all forms of racial discrimination in private contracting. As the late Justice Ginsburg noted just last year, Section 1981 is a “‘sweeping’ law designed to ‘break down all discrimination between black men and white men’ regarding ‘basic civil rights'” Comcast Corp. v. Nat’l Ass’n of Afr. Am.-Owned Media, 140 S.Ct. 1009, 1020 (2020) (Ginsburg, J. concurring) (quoting Jones v. Alfred H. Mayer Co., 392 U.S. 409, 432 (1968) (emphasis in original). And decades of case law have held that — no matter how well intentioned — policies that seek to impose permanent racial balancing are prohibited. See, e.g., United Steelworkers of America v. Weber, 443 U.S. 193, 208 (1979); Johnson v. Transp. Agency, U.S. 616, 621 & 632 (1987).

As the Reconstruction-era Congress understood, the legal tools of segregation are fundamentally corrupt; they poison all they touch. That these same tools may be used with the intent of achieving “parity” rather than exclusion is irrelevant. Racial quotas perpetuate the invidious racial classifications of Jim Crow, and they rely on the false, racist notion that blacks and other racial minorities are somehow unable to compete with members of other races. As Justice Thomas has written, “there is a moral and constitutional equivalence between laws designed to subjugate a race and those that distribute benefits on the basis of race in order to foster some current notion of equality.” Advanced Constructors Inc. v. Pena, 515 U.S. 200, 240 (Thomas, J., concurring).

The abrupt departure of Bradley Gayton after less than a year as General Counsel suggests that Coca-Cola is already aware that its racial quota requirements on outside firms are indefensible. Indeed, if press reports are accurate, Coca-Cola has already paused the policy, though with the intention of retaining at least some of its provisions. This pause is a welcome development, but more is needed. Racial discrimination should have no place in private contracting, and Coca-Cola should act swiftly to publicly undo this destructive legacy of Mr. Gayton’s tenure.

In my post about Coca-Cola’s discriminatory policy, I wrote that “Coke can take comfort from the fact that no law firm is likely to sue the company or its officers.” I may have underestimated Project for Fair Representation and its head, Edward Blum.

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