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Racial Discrimination Lawsuits & Complaints Hit Black Entrepreneurs Over Initiatives Supporting Minority Or Black-Owned Businesses

Months after the U.S. Supreme Court ended affirmative action in higher education, conservative activists are challenging programs aimed at reducing racial disparities in business. Initiatives supporting minority- or Black-owned companies face legal action over their constitutionality.

Ed Blum, known for his stance against #affirmativeaction in college admissions, is now targeting such business initiatives. His group, the American Alliance for Equal Rights, sued the Fearless Fund, a venture capital fund run by Black women, to stop them from providing grants to businesses owned primarily by Black women. Blum claims the Fearless Strivers Grant Contest violates #civilrights law.

The 11th U.S. Circuit Court of Appeals in Atlanta ruled 2-1 on September 30 to halt the program, reversing a prior federal ruling. The Fearless Fund expressed strong disagreement with the decision, emphasizing their commitment to address disparities in venture capital for Black women and other women of color.

This legal action is part of a larger backlash against initiatives supporting minority-owned businesses. Despite making up 14.2% of the U.S. population, Black people represent less than 3% of business owners. Black business owners typically receive less than 2% of all venture capital funding annually. They also face challenges such as receiving inferior loan offers compared to white peers, even when they are more qualified.

Efforts to support Black-owned businesses include venture capital initiatives and government policies for hiring minority-owned businesses for contracts. However, these efforts are increasingly under legal scrutiny.

Conservative groups and state attorneys general are focusing on race considerations in business following the Supreme Court's decision on affirmative action. Meanwhile, some businesses are downplaying their diversity efforts to avoid lawsuits. Legal experts express concern about the future of diversity, equity, and inclusion in the workplace.

The Fearless Fund has provided significant support to women-of-color-owned businesses. It was founded by Arian Simone and actor Keshia Knight Pulliam in 2019, with Ayana Parsons later joining as COO. Beneficiaries like LS Cream Liqueur have seen transformative growth from the fund's investment.

Blum argues that racial disparities in funding do not justify excluding other races or ethnicities from public programs. His perspective is that if a program exclusively benefiting white men is unfair and illegal, so is one prioritizing Black women.

Civil rights lawyers defending the Fearless Fund argue that the grants are protected by the First Amendment as donations, not contracts. However, the court rejected this, stating that the First Amendment does not permit exclusion based on race in contractual regimes.

We will be following this story as more comes out. 

Link: NBCNews


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