In a new skirmish in the volatile ESG and culture wars, a Florida federal court preliminarily enjoined enforcement of portions of Florida’s “anti-woke” law, which prohibits employers from requiring employees to attend training sessions or other activities that “espouse” or “promote” eight “concepts” relating to race, color, sex, or national origin.  U.S. District Judge Mark Walker held in Honeyfund.com, Inc. v. DeSantis (N.D. Fla. Aug. 18, 2022), that the statute is a “naked viewpoint-based regulation on speech,” in violation of the First Amendment, and also is unconstitutionally vague.

The Florida statute and the ensuing litigation illustrate the ongoing tensions between some employers’ efforts to promote diversity, equity, and inclusion (“DEI”) in the workplace and the political sensibilities of certain constituencies that claim to be offended by ESG-related measures.  The Honeyfund decision, if ultimately upheld, should provide some comfort to employers that seek to advance DEI and other ESG objectives and could help protect them against retaliatory content-based governmental actions affecting speech.

Statutory Background

In 2022, Florida enacted the Individual Freedom Act (the “IFA”), which Governor DeSantis called the “Stop Woke Act.”  The IFA amends the Florida Civil Rights Act of 1992 by expanding the definition of an unlawful employment practice to include requiring employees to attend training or other “required activity” that “espouses, promotes, advances, inculcates, or compels [employees] to believe any of” eight specified “concepts” relating to race, color, sex, or national origin.  Those “concepts” include whether members of one group are “morally superior” to members of another group, whether a person is “inherently racist, sexist, or oppressive” by virtue of his or her membership in a particular group, whether persons should be treated in a particular way because of membership in a group, whether a person “bears responsibility for, or should be discriminated against or receive adverse treatment because of” actions committed in the past, etc.

The IFA does not prohibit “discussion of the concepts listed therein as part of a course of training or instruction” if such “training or instruction is given in an objective manner without endorsement of the concepts.”

Factual Background

Several plaintiffs challenged the IFA under the First Amendment to the U.S. Constitution.  Some plaintiffs are employers who wish to conduct mandatory DEI training sessions that they are concerned are now prohibited by the IFA.  Another plaintiff is a DEI consultant who provides such training and who claims to have lost business because of the IFA.

Plaintiffs alleged that the IFA violates the First Amendment because it seeks to regulate speech based on content and viewpoint and cannot withstand strict scrutiny.  They also claimed that the statute – including its carve-out for “objective” training – is unconstitutionally vague.  Judge Walker agreed and granted a preliminary injunction, holding that plaintiffs are likely to succeed on the merits and that the other criteria for granting preliminary injunctive relief also tip in their favor.

The Court’s Decision

The court began with the principle that, under the First Amendment, “[t]he State may not burden the speech of others in order to tilt public debate in a preferred direction.”  The IFA, however, does just that.  It “does not ban all mandatory employee trainings,” or even “mandatory trainings addressing certain concepts.”  Rather, the state prohibits only “trainings that endorse the covered concepts.”  “[T]he only way to determine whether the IFA bars a mandatory activity is to look to the viewpoint expressed at that activity – to look at speech.”

Accordingly, because it discriminates based on the content of the regulated speech, the statute is presumptively unconstitutional unless it can survive strict scrutiny, which requires the government to prove that the law is “narrowly tailored to serve compelling state interests.”  The court ruled that the IFA could not survive strict-scrutiny review.

• The court did not find a compelling state interest, in that “[t]he First Amendment does not give the state license to censor speech because it finds it ‘repugnant,’ no matter how captive the audience” of employee trainees might be.

• The court also held that, even if one assumes the IFA serves a compelling governmental interest such as prohibiting discrimination, the Florida Civil Rights Act “already prohibited much of what Defendants claim the IFA aims to prohibit.”  “For example, a diversity and inclusion training could be so offensive, and so hostile to White employees, that it could create a hostile work environment.  That is already illegal – as both parties acknowledge.”

In addition to concluding that plaintiffs would likely be able to succeed on their claim that the IFA violates the First Amendment, the court agreed that the statute is impermissibly vague.  The court viewed at least some of the eight prohibited “concepts” as “mired in obscurity” or even “bordering on unintelligible.”  Moreover, “the entire statute was rendered vague by the qualifier that ‘discussion’ of the prohibited concepts is permissible if ‘given in an objective manner without endorsement.’”  “[F]ew terms are as loaded and contested as ‘objective,’” and “objective discussion, if attainable, is even more difficult with respect to controversial matters like the eight prohibited concepts here, where many, including Defendants, question their legitimacy.”

The court therefore preliminarily enjoined enforcement of the statute.

Implications

DEI and other ESG issues have become political hot potatoes in recent years.  On the one hand, investors (especially some prominent institutional investors), employees, customers, and other corporate stakeholders are demanding that companies take steps to promote ESG-related considerations such as environmental impact, employee welfare, DEI, and effects on communities at large.  Some advocates of that position believe that promoting ESG concerns is the “right” thing to do for society at large; others believe that doing so is necessary to enhance corporate growth and sustainability and to protect corporations from the risks that could arise from ignoring ESG considerations.  On the other hand, however, other constituencies have expressed hostility to ESG concerns and have sought to punish companies that promote them.  Some governmental entities have tried to retaliate against companies that have engaged in what they derogatorily term “woke” speech or activities.

The Honeyfund decision illustrates the extent to which the First Amendment might prohibit such retaliatory measures and allowcompanies to pursue ESG-related speech in which they wish to engage.  The decision’s reasoning, if upheld and if accepted by other courts, might shield employers and other companies from (for example) legislation seeking to punish or discourage efforts to endorse the use of alternative energy sources instead of fossil fuels, or to take positions on guns, reproductive rights, and DEI issues.

But while the First Amendment can be an important shield, its use is hardly cost-free.  Apart from the financial expenses of litigating a First Amendment challenge, a suit seeking to void a statute as unconstitutional pits the litigant against the government in a politically charged context.  Some (perhaps many) corporations might not be willing to engage in such warfare, especially where the government has the power to regulate some of the company’s activities.

Moreover, the First Amendment does not necessarily protect conduct, as opposed to speech.