Proposal 2, "The Michigan Civil Rights Initiative," was passed by the voters on November 7, 2006. Proposal 2 will amend the State Constitution to prohibit the State of Michigan, Colleges and Universities, and municipalities from discriminating against or providing preferential treatment to any person in public employment, public education, or public contracting based on characteristics such as sex, color, ethnicity, or national origin. We have received numerous inquiries from our clients regarding Proposal 2, and have put together the following brief summary.
1. Who does Proposal 2 impact?
Proposal 2 directly impacts only public entities. Specifically, it applies to the State of Michigan, and any city, county, or political subdivision or government instrumentality of the State. It also applies to any public college, university, community college, or school district.
2. When does Proposal 2 become effective?
Proposal 2 becomes effective forty-five (45) days after the date of the election. The election was held on November 7, so Proposal 2 takes effect December 23, 2006.
3. Is Proposal 2, the Michigan Civil Rights Initiative, constitutional?
Although at least one legal challenge has already been filed against Proposal 2, the Proposal will most likely be upheld as constitutional. On November 8, 2006, the day after the election, a complaint for injunctive and declaratory relief was filed in the United States District Court for the Eastern District of Michigan claiming that Proposal 2 (1) violates the Equal Protection Clause of the Fourteenth Amendment in the United States Constitution; (2) is preempted by the Civil Rights Act of 1964; and (3) violates the Freedom of Speech clause of the First Amendment to the United States Constitution. A very similar amendment to the California Constitution, Proposition 209, was met with similar challenges and was upheld by the Ninth Circuit Court of Appeals. Coalition for Economic Equality v. Wilson, 122 F.3d 692 (9th Cir. 1997). In that case, the court found that proposition 209 did not violate the Equal Protection clause nor was it preempted by the Civil Rights Act of 1964. Though the Ninth Circuit's opinion is not binding on the Eastern District or the Sixth Circuit Court of Appeals, those federal courts will certainly look to the Ninth Circuit's opinion for guidance.
4. What is the impact of Proposal 2 on private entities and may private entities maintain an affirmative action plan?
Proposal 2 does not directly regulate private businesses. As such, private entities will still be allowed to maintain affirmative action programs provided that those programs are in compliance with federal law. Although the actual, long-term impact of Proposal 2 remains to be seen, private companies may indirectly be impacted if the elimination of affirmative action in college admissions results in a less-diverse student body and hence, a less diverse applicant pool from which to recruit.
5. Will public entities still be able to receive federal funding if such entities are not allowed to have affirmative action programs?
Yes. Proposal 2 contains an exception to the general prohibition of affirmative action which provides that it "does not prohibit action that must be taken to establish or maintain eligibility for any federal program, if ineligibility would result in a loss of federal funds to the state." This exception is similar to one which appears in California's Proposition 209. Courts interpreting that exception have held that the governmental entity does not have to first obtain a court ruling that the race-based decision making is necessary to maintain federal funding. Instead, the public entity can continue its affirmative action program if it can present "substantial evidence that it will lose federal funding if it does not use race-based measures and must narrowly tailor those measures to minimize race-based discrimination." C&C Construction, Inc. v. Sacramento Municipal Utility District, 122 Cal. App. 4th 284, 298 (2004). The federal mandate, however, must specifically require the entity to use race-based affirmative action programs. If the federal mandate does not specifically require race-based programs, but instead allows race-neutral affirmative action programs, then the race-neutral affirmative action programs must be used instead.
6. Will public entities that use race- or gender-based affirmative action programs have to demote or fire those individuals who have been employed because of such affirmative action programs?
No. If Michigan courts follow the same reasoning that the California Courts have used, then employers will not be required to demote or fire those individuals who were employed because of affirmative action programs. In California, a court held that removal of individuals who have been hired because of an affirmative action program, is an improper remedy. Kidd v. State of California, 62 Cal. App. 4th 386, 410 (1998). ("The beneficiaries [of the race-based affirmative action program] did not cause the City to do what it did. It would be inequitable to penalize them by ousting them from their positions.")
7. After passage of Proposal 2, will race- or gender-based outreach programs used by public entities remain constitutional?
Unclear. Following the passage of Proposition 209, most race-or gender-based outreach programs in California were found to be unconstitutional. This included policies that provided only a slight preference to women or minorities, along with outreach programs that targeted or focused on women and minorities. This is not to say, however, that all outreach is presumptively invalid. Outreach programs that are inclusive of all genders and races are permissible. Such inclusive outreach options include: (1) policies that remove barriers to employment; (2) advertising in several different publications including those directed toward females and minorities; or, (3) holding job fairs in heavily minority areas as long as non-minorities are allowed to attend.
As noted above, one lawsuit has already been filed challenging Proposal 2 and there likely will be many more to come that either directly challenge Proposal 2 or challenge various policies and programs as violating Proposal 2. We will continue to monitor developments relating to this very important issue and provide periodic updates. If you have particular questions relating to this or any other matter, please contact any member of our Labor & Employment Practice Group.