February 11, 2025
Will ERG’s Survive DEI Challenges?
Employee Resource Groups or ERG’s are voluntary, employee-led groups of like individuals who lend support to one another and foster a sense of belonging (DEIBA) in the workplace. Common ERG’s are those based on sex, race, parental status, and more.
Like everything, there are pros and cons. As described above, the activities may provide a sense of belonging and inclusion to the members of the group. Employees outside the group may feel the workforce is being divided and they are being excluded.
My observation is that legal challenges to employers’ use of these groups has increased. I thought the lawsuit filed against Starbucks was interesting. The Missouri Attorney General announced that he has filed a lawsuit against the company citing a variety of employment-related activities, including the CEO’s history of supporting ERGs. The suit alleges, “Starbucks ties compensation to racial and sex-based quotas, discriminates on the basis of race and sex in training and advancement opportunities, and discriminates on the basis of race and sex with respect to its board membership.”
The lawsuit references the current CEO’s initiative in his previous role (CEO of Chipotle), where he piloted an ERG as “a mentorship program identifying a diverse group of high potential talent for development and greater advancement within the company.” The question is, how was the diversity of the group defined or measured? Those details should come out in the litigation.
As we navigate what seems like almost daily flip-flops regarding what DEIBA practices are/not legally permissible, you might look to your company’s internal goals, plans, compensation structure, and more.
Options? If you have or are considering an ERG’s you might look to employees’ common interests rather than protected status. Ask your employees what interests them. Reading? Start a book club. Professional development? Start a Special Interest Group (SIG) focused on a professional interest like HR, Finance, Sales, etc. Generate more options by talking to your company’s legal counsel about how you can support your diversity and inclusion goals without running afoul of employment discrimination.
