The US Federal Trade Commission (FTC) has recently sent warning letters to 42 prominent law firms, raising antitrust concerns over their participation in a widely recognized diversity certification program. As the FTC points out, the program, operated by Diversity Lab and known as the Mansfield Certification, could potentially infringe upon federal antitrust laws. The program obligates law firms to ensure that at least 30% of candidates considered for promotions and leadership roles hail from underrepresented groups.
The FTC’s cautionary communication specifically underscores the coordinated practices among these law firms, arguing that such actions might resemble anticompetitive collusion. Andrew Ferguson, the FTC Chairman, spotlighted the monthly “knowledge-sharing” sessions among participating firms, suggesting this could represent an exchange of competitively sensitive information. The significance here lies in the fact that these firms, collectively employing over 50,000 attorneys, often compete within the same talent pool, possibly affecting market dynamics, including wage suppression.
According to Ferguson, enforcing quotas or making decisions based solely on race, sex, or other non-merit-based characteristics may distort competition within the legal labor market. This perspective aligns with Section 1 of the Sherman Act and Section 5 of the FTC Act, legal frameworks originally designed to counteract price-fixing and market manipulation.
Law firms are advised to reassess their affiliations and collaborative efforts with Diversity Lab to ensure they comply with these antitrust guidelines. Although no formal accusations have been made, the FTC’s emphasis lies in notifying firms of their potential legal exposure.
This development is part of a broader initiative by governmental bodies to scrutinize Diversity, Equity, and Inclusion (DEI) programs in both public and private sectors. In March, the Equal Employment Opportunity Commission issued warnings to several significant law firms regarding similar DEI programs, and subsequent executive actions have underscored this scrutiny. More details about this can be found in the original article on JURIST.
With the legal industry’s continuous push for diversity, these regulatory actions could shape future DEI strategies, urging firms to ensure their initiatives align with antitrust laws.