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Supreme Court Debates U.S. Government’s Race and Ethnicity Categories: What Employers Need to Know
Thursday, July 20, 2023

On June 29, 2023, the Supreme Court of the United States struck down affirmative action in college admissions, leaving employers to wrestle with the implications of the decision for various diversity, equity, and inclusion (DEI) initiatives. The decision also contained a robust debate over the government’s race and ethnicity categories, which the university respondents used in their admissions processes. Many employers use those same race and ethnicity categories for various government reporting and recordkeeping purposes. The Supreme Court’s discussion of the categories was particularly timely, given the ongoing work of the Office of Management and Budget’s (OMB) Federal Interagency Technical Working Group on Race and Ethnicity Standards. Convened in 2022, this working group is currently considering revisions to the categories “to improve the quality and usefulness of Federal race and ethnicity data.”

Quick Hits

  • In 2022, OMB convened an interagency working group to review the government’s standards on collecting race and ethnicity data.

  • OMB’s public comment period on proposals to revise existing race and ethnicity standards closed in April 2023, but the working group states that it will “continue to hold public listening sessions into Fall 2023.”

  • The working group’s goal is to finish revisions of the SPD 15 standards by summer 2024.

  • Numerous Supreme Court justices recently discussed these race and ethnicity standards as part of the ruling ending affirmative action in college admissions.

Background on OMB’s Race and Ethnicity Categories

OMB has developed a number of race and ethnicity categories to ensure that data on race and ethnicity is collected and used in a consistent manner across federal agencies. This minimum set of categories was first created in 1977 in Statistical Policy Directive No. 15: Race and Ethnic Standards for Federal Statistics and Administrative Reporting (SPD 15). SPD 15 was revised once, resulting in OMB’s 1997 Statistical Policy Directive No. 15: Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity. Under the 1997 standards, respondents self-identify their race and ethnicity in two separate questions: first, they identify their ethnicity (e.g., “Hispanic or Latino” or “Not Hispanic or Latino”); second, they identify their race (e.g., “American Indian or Alaska Native,” “Asian,” “Black or African American,” “Native Hawaiian or Other Pacific Islander,” or “White.”) The 1997 revision to SPD 15 also allowed respondents to report multiple races.

These categories are used for a wide variety of purposes, including to satisfy data collection and compliance reporting requirements that impact many employers. Employers with one hundred or more employees use these categories to file annual EEO-1 Component 1 Data Collection (Employer Information Report) surveys. Employers that are federal contractors and subcontractors also use these categories to prepare their affirmative action programs (AAPs).

In addition, educational institutions may use these categories as part of their admissions processes. The university respondents involved in the most recent affirmative action case before the Supreme Court let applicants choose from the six categories and allowed them to write in additional details.

Update on the OMB Working Group’s Proposals

On January 27, 2023, OMB published a notice in the Federal Register seeking comments on proposals to revise the existing race and ethnicity categories to better reflect the increasing diversity within the United States. The initial proposals included “[c]ollecting race and ethnicity information using one combined question,” “[a]dding ‘Middle Eastern or North African’ (MENA) as a new response category,” and “[r]equiring the collection of detailed race and ethnicity categories by default.” The comment period closed on April 27, 2023, and OMB received more than 20,000 comments. In a post on the OMB working group’s website on May 22, 2023, the working group explained that it would continue to hold public listening sessions into the fall of 2023, with a goal of revising SPD 15 by the summer of 2024.

The Supreme Court’s Discussion of Race and Ethnicity Categories

Throughout the Supreme Court’s 237-page affirmative action opinion (including concurrences and dissents), numerous justices discussed the government’s race and ethnicity categories, which were used by the university respondents. Writing for the majority, Chief Justice John Roberts called the categories “imprecise,” noting that some are “plainly overbroad” while others are “underinclusive.”

For example, Chief Justice Roberts questioned the “Asian” category, which grouped together all Asian students, regardless of whether they were South Asian or East Asian, and the “Hispanic” category, which he described as “arbitrary or undefined.” To support his claim that some categories were actually “underinclusive,” he described an exchange during oral argument where counsel for one of the university respondents could not answer where applicants from Middle Eastern countries would fall within the existing race categories. According to the majority opinion, written by Chief Justice Roberts, “the use of these opaque racial categories undermines, instead of promotes, respondents’ goals.”

Justice Neil Gorsuch dedicated three pages of his concurring opinion to a discussion of these categories, arguing that they “rest on incoherent stereotypes” created by “[b]ureaucracts.” Like Chief Justice Roberts, Justice Gorsuch took issue with the “Asian” category due to its expansive definition encompassing many “differences in ‘language,’ ‘culture,’ and historical experience.” He also discussed the “Native Hawaiian or Other Pacific Islander” category, which, he argued, had only been separated from the “Asian” category in the 1990s due to “political lobbying” and contains “curiosities,” such as the fact that Filipino Americans remain classified as “Asian” rather than “Other Pacific Islander.” He noted that other categories also rest on “irrational stereotypes.” According to Justice Gorsuch, the “Hispanic” category is inconsistent in terms of which languages and ancestry are included, while the “White” category includes anyone from “Europe, Asia west of India, and North Africa” and the “Black or African American” category covers Americans and immigrants, as well as Black-identifying applicants with multiracial backgrounds.

Justice Clarence Thomas agreed with both the majority and Justice Gorsuch, stating in a concurrence, “[I]t is abundantly clear that the university respondents’ racial categories are vastly oversimplistic.”

Justice Sonia Sotomayor, on the other hand, defended the categories in her dissent. First, she noted that the categories are used across the federal government, including, for example, by the U.S. Census Bureau, in ways that “[s]urely” are not “constitutionally suspect.” Next, she argued that there was nothing in the record indicating that students were unable to identify their own races in a satisfactory way using the existing race and ethnicity categories. “There is no evidence that the racial categories that respondents use are unworkable,” Justice Sotomayor stated.

Key Takeaways

There has been a renewed focus on the government’s race and ethnicity categories over the past year. OMB’s working group and the Supreme Court’s most recent affirmative action decision shed more light on the debate over the potential benefits and shortcomings of the existing categories.

This debate may have real implications for employers that use these categories for compliance and recordkeeping purposes. Covered contractors with affirmative action obligations and employers with one hundred or more employees may want to closely monitor the working group for additional developments because the working group’s anticipated revisions will certainly impact the self-identification categories that employers use for compliance and recordkeeping purposes. In addition, employers may want to consider evaluating whether the government’s categories actually help them with their DEI initiatives, or if providing additional categories for self-identification purposes might be prudent.

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