Posted on March 24, 2024

Firms From KKR to Coors Flag DEI as Business, Legal Risk

Clara Hudson and Riddhi Setty, Bloomberg, March 11, 2024

JetBlue Airways Corp., Molson Coors Beverage Co., and Leidos Holdings, Inc. are part of a growing group of companies listing DEI as a “risk factor” in their securities filings, citing a potential business impact from taking too much or too little action on diversity.

The flurry of securities filings noting potential legal and reputation risks stemming from diversity, equity and inclusion efforts follows the US Supreme Court’s June decision curtailing affirmative action in college admissions, as well as political backlash from conservative groups that say corporate DEI programs discriminate against White and male workers.

Former Trump advisor Stephen Miller-led America First Legal has filed bias litigation and sent over 30 requests to the US Equal Employment Opportunity Commission to investigate DEI policies at companies like Southwest Airlines Co, Major League Baseball, and Macy’s Inc. Some companies, including Pfizer Inc., have altered the eligibility language of their DEI programs following lawsuits.

While some companies have scaled back or reshaped their DEI efforts, businesses overall are telling shareholders diversity is still a priority. Companies that list diversity efforts as a risk factor in their 10-Ks also point to DEI in the filings as pivotal to the success of their business.

Out of more than a thousand public companies that filed 10-Ks between the Supreme Court’s decision and March 8, more than two dozen of them mentioned DEI as a risk factor, according to a Bloomberg Law analysis. Some companies were also reporting DEI as a risk factor before the Supreme Court decision, but they mainly focused on risk from not doing enough on DEI, the analysis showed.


The companies noting DEI as a risk come from an array of industries, from educational technology company Duolingo, Inc. to investment management company KKR & Co. Inc.


JetBlue said in its 10-K on Feb. 12, that “negative perception of DEI initiatives, whether due to our perceived over-or under-pursuit of such initiatives, may likewise result in issues hiring or retaining employees, as well as potential litigation or other adverse impacts.”

Engineering company Leidos said there’s a risk it could be “viewed negatively based on positions we do or do not take or work we do or do not perform” on environmental social and governance, including DEI goals, according to its filing on Feb.13.


Some companies were explicit about the impact of the high court’s affirmative action decision and conservative backlash.


Aside from risk factor disclosures, some companies are using risk-hedging language to talk about diversity efforts more broadly. Over a dozen US companies including Uber Technologies Inc. have removed DEI terms like “anti-racist” and “unconscious bias” from their corporate filings this year, according to Bloomberg News.

Bloomberg News has also reported that companies including JPMorgan Chase & Co. and United Parcel Service Inc., dropped references to specific groups like women and LGBTQ+ workers that their diversity initiatives were meant to help. Coca-Cola Co. dropped references to a program focused on promoting women into more senior roles after three years of mentions, according to the article.

Major law firms Morrison & Foerster LLP and Perkins Coie LLP made changes to the eligibility language of their diversity and inclusion programs after being sued by conservative activist Edward Blum’s American Alliance for Equal Rights. The organization dropped its suits against Morrison & Foerster and Perkins Coie following the language changes. Another law firm, Gibson, Dunn & Crutcher LLP, which represented Morrison & Foerster in the AAER litigation, also changed the eligibility criteria for its diversity scholarships.

But most companies are continuing to embrace DEI as a corporate value.

survey of 194 chief human resource officers published by the Conference Board in December found that none of the respondents plan to scale back their DEI initiatives, programs or policies. In fact, 63% said they plan to focus on attracting a more diverse workforce.