In the recent case of Behavioral Interventions Inc v Mo Office of Administration pending in the U.S. District Court, Western District of Missouri, the State of Missouri’s affirmative action program was challenged as unconstitutional where the program allegedly:
- Employed goals irrelevant to availability of qualified MBE/WBE firms;
- Did not utilize a fair waiver system;
- Was based on stale data, where the state’s underlying disparity study was 15 years old;
- Did not contain size standards or graduation requirements;
- Contained no race-neutral measures.
Following several months of briefing, the court issued an injunctive order temporarily suspending the State’s program until trial in May 2005. The case was ultimately settled in May by the State’s revision of the program.
Impact of Challenges
Although prejudice still exists, the above challenge reflects a growing frustration by white male business owners who feel they can no longer effectively compete against incentives favoring minority and women owned businesses. This frustration has resulted in a growing number of legal challenges raised throughout the country. The challenges serve as a wake-up call to governmental entities and MBE/WBE participants that its time to review the local program and, where necessary, bolster its constitutional safeguards.
Constitutional Parameters for Valid Affirmative Action Programs
The 1989 Supreme Court case of City of Richmond versus J.A. Croson, identified the parameters for a constitutionally valid affirmative action program at the local and state level. Specifically, to pass muster, the government must prove:
- It has a compelling interest in creating the program, AND
- The program as designed and implemented is narrowly tailored to address that interest.
The same standard for federal programs was adopted in the recent 2000 – 2002 three-part series of challenges known as Adarand Constructors v. Pena.
Proof of “Compelling Government Interest”
A “compelling government interest” is established through statistical proof of past discrimination against specific groups. These studies, now known as Croson Studies, analyze: (1) specific identification of MBE/WBE firms in that particular region; (2) the scopes and magnitudes of work they can perform; and (3) the forms of discrimination they have earlier encountered in terms of educational opportunities; business formation; credit and finance; bonding; and job procurement. The Croson Studies, thus become the underpinning for any constitutionally valid program.
Many local and state governments implemented these studies in the years following the 1989 Croson decision. The studies identified many instances of past discrimination. However significant, recent decisions hold that these early Croson studies cannot perpetually justify the programs – in other words, the statistical studies must be repeated at regular intervals to ensure the data is fresh. While there is no litmus test on how long studies are deemed valid, the cases suggest the study should be updated on a regular basis every seven to ten years, at a minimum. This suggests that many local and state governments should implement steps now to review and update their older Croson studies.
Proof that a Program is “Narrowly Tailored”
The government must additionally prove the program is “narrowly tailored” to remedy past discrimination. Croson and Adarand identify “narrow tailoring” as requiring analysis of whether the program:
- Is more than mere “racial balancing”
- Is based on the number of local qualified minorities and women owned firms, in that region, who are capable of performing the work required in each particular contract;
- Is not over inclusive by presuming discrimination against certain minorities;
- Is not under inclusive by omitting race neutral measures designed to assist small business in general;
- Does not implement mandatory quotas.
What do these challenges mean? Local governments should be reviewing their disparity studies to ensure the data is fresh. If not, the studies should be immediately updated. Local minority and women owned firms who have not previously certified as such, should do so. Otherwise the government cannot rely on accurate “availability” data. Certifications should detail ALL scopes of work that firm is capable of performing. Women minorities should double certify both as minority-owned firms as well as women-owned firms. Small businesses who are not MBE/WBE should also be involved in reviewing and familiarizing themselves with the race neutral business assistance services these programs typically have. Bottom line is, affirmative action will continue to be around. By all parties’ active participation, the programs can and should operate in a fair manner.
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