A federal district court in Texas has permanently enjoined the U.S. Commerce Department’s Minority Business Development Agency (MBDA) from considering an applicant’s race or ethnicity when determining eligibility for the agency’s business assistance programs. In Nuziard v. Minority Business Development Agency, (N.D. Tex. March 5, 2024), a group of White owners of small businesses sued the MBDA after they were denied assistance because of their race. The U.S. District Court for the Northern District of Texas granted summary judgment on their equal protection claim, holding that the MBDA’s eligibility standards violate the Constitution’s Equal Protection Clause by discriminating against White business owners.
While the ruling does not directly apply to private employer diversity programs, it highlights the risks of maintaining a diversity program relying on race-based criteria or decision making in the wake of the U.S. Supreme Court’s 2023 Harvard/UNC decision.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.