Reframing the DEI Case

Reframing the DEI Case Veronica Root Martinez* ABSTRACT Corporate firms have long expressed their support for the idea that their organizations should become more demographically diverse while creating a culture that is inclusive of all members of the firm. These firms have traditionally, however, not been successful at improving demographic diversity and true inclusion within the upper echelons of their organizations. The status quo seemed unlikely to move, but expectations for corporate firms were upended after the #MeToo Movement of 2017 and 2018, which was followed by corporate support of the #BlackLivesMatter Movement in 2020. These two social movements, while distinct in many ways, forced firms to rethink how to approach the status of women and people of color within their organizations. It forced them to ask, yet again, but with renewed energy: “What is the best way to improve diversity and inclusion within firms?” This Article seeks to contribute to scholarly conversations aimed at addressing that, admittedly elusive, question head-on. It argues that in addition to pursuing the business and legal cases for diversity when crafting diversity, equity, and inclusion (“DEI”) programs, firms should also employ insights from behavioral ethics literature. By utilizing insights from behavioral ethics literature, firms can better prompt decisionmakers to recognize that DEI questions—whether under the business or legal case for diversity—are questions that should be evaluated from an ethical perspective. Scholars and firm leaders have long debated the accuracy of the business case rationale in support of DEI efforts. More recent scholarship has focused on the legal case in support of DEI efforts. This Article recognizes that firms committed to crafting meaningful DEI reforms must focus on both the business and legal cases, but they must reinforce the ethical ramifications of DEI concerns under both frameworks. In short, firms committed to creating a successful DEI * Professor of Law, Duke University School of Law. Many thanks to the participants of the Berle XIII—Inclusive Corporate Leadership symposium. 399 400 Seattle University Law Review [Vol. 46:399 program must find ways to evoke ethical framing when engaged in the creation of diverse, equitable, and inclusive organizational cultures. CONTENTS INTRODUCTION ..................................................................................... 400 I. THE TRADITIONAL ARGUMENTS. ...................................................... 403 A. The Business Case ......................................................................... 403 B. The Legal Case.............................................................................. 405 C. A Caveat: The Moral Case. .......................................................... 407 II. INCORPORATING BEHAVIORAL ETHICS INSIGHTS. ........................... 408 A. Necessary, But Not Sufficient ........................................................ 409 B. Behavioral Ethics as Applied to DEI Efforts ................................ 411 III. THE EFFECT OF REFRAMING ........................................................... 413 A. Reframing the Business Case ........................................................ 413 B. Reframing the Legal Case ............................................................. 415 IV. CLARIFYING QUESTIONS ................................................................ 416 A. Should the Business Case Be Abandoned Wholesale? .................. 416 B. Does the Moral Case Obfuscate the Need for Reframing? ........... 418 CONCLUSION ......................................................................................... 419 INTRODUCTION In 2000, the Coca-Cola Company (“Coke”)1 entered into a landmark settlement to resolve a lawsuit brought by black employees alleging that the company had discriminated against them. The settlement terms required Coke to pay $192.5 million.2 At the time, it was the largest settlement arising out of a U.S. race-discrimination lawsuit.3 The settlement was unusual, in part, because Coke agreed to allow “an outside panel, appointed by Coke and the plaintiffs’ lawyers, limited authority to revise company personnel policy.”4 The “panel [was] charged with ensuring that Coke’s record of paying and promoting all minority workers and women improve[d]. Unless granted an exception by a judge, the company [was required to] adopt the suggestions.”5 For many, this settlement, particularly when paired with another significant employment 1. During the summers of 2003 and 2004, I was a brand marketing intern at the Coca-Cola Company in Atlanta, GA. 2. Sarah Schafer, Coke to Pay $193 Million in Bias Suit, WASH. POST (Nov. 17, 2000), https://www.washingtonpost.com/archive/politics/2000/11/17/coke-to-pay-193-million-in-biassuit/6a43c0c7-dcde-4d8c-a95f-3fe57c508c85/ [https://perma.cc/F76K-S3VY]. 3. Id. 4. Greg Winter, Coca-Cola Settles Racial Bias Case, N.Y. TIMES (Nov. 17, 2000), https://www.nytimes.com/2000/11/17/business/coca-cola-settles-racial-bias-case.html [https://perma.cc/X6YY-H79D]. 5. Id. 2023] Reframing the DEI Case 401 discrimination settlement involving Texaco6 a few years prior, seemed like a watershed moment. It was finally time for corporate firms to take concerns surrounding discrimination seriously, but it was also seen by some as an opportunity for firms to establish effective diversity and inclusion programs. Whether it was Coke, Texaco, or a number of other organizations, corporate firms have long embraced the need to dedicate time and resources to diversity and inclusion efforts within their ranks. Coke, for example, hired Deval Patrick to serve as its General Counsel shortly after its 2000 discrimination settlement.7 Patrick had previously “spearheaded efforts to improve diversity at Texaco” and was expected to use his experience in employment law and civil rights to assist the company in “improv[ing] its record on diversity.”8 It was understood by many that his appointment was meant to spur a moment of transformational change not only at the firm, but also throughout corporate America more generally. The circumstances that unfolded at Coke are a wonderful example of the two challenges firms have often focused upon—the legal case for diversity and the business case. Those making the legal case for firms to adopt diversity and inclusion programs often focus on the importance of (i) complying with regulatory and legal mandates and (ii) minimizing legal liability. By settling the lawsuit with its employees and by allowing the outside panel to assist it in revamping its policies and procedures, Coke was addressing two concerns that are commonly associated with the legal case for diversity. Coke, however, also appeared to understand the business case for diversity. The business case for diversity “offers a connection between increased diversity and inclusion and positive performance outcomes.”9 When Coke decided to s (...truncated)