Exclusives

EXCLUSIVE: Trial Lawyers Quietly Using Woke Lawfare To Hamper American Businesses

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Many law firms are engaging in “woke lawfare,” using courtroom settlements to force diversity bureaucracies and racial hiring quotas on American companies, according to a conservative free-market advocacy group.

Multiple legal settlements over the past decade have forced corporations to enact gender and diversity, equality and inclusion (DEI) policies that harm shareholder value and ultimately hurt consumers, according to a report from Alliance for Consumers, first obtained by the Daily Caller News Foundation. The legal settlements may have bolstered the spread of DEI policies across corporate America.

“These settlements were a serious driver of DEI policies, as they pushed vast sums of money into the DEI machine and empowered or imported DEI activists inside companies,” Alliance for Consumers Executive Director OH Skinner told the DCNF. “And every settlement put money into the hands of trial lawyers, who used this to roll out more lawsuits.” 

Alliance for Consumers looked at eight resolved cases and five ongoing court battles, spanning across financial, retail, shipping, tech and government sectors. The report concludes that “the American legal system is being weaponized for political purposes.”

“Lawsuits are increasingly used not to resolve disputes or compensate victims, but to impose policy changes that advocates have been unable to achieve through democratic processes,” the report says.

For instance, after a decade of court battles in the case of Chen-Oster v. Goldman Sachs, the company settled allegations of systematically underpaying and under-promoting women by paying $215 million and hired outside firms to review pay and performance decisions. The settlement regime meant “effectively placing ideologically sensitive HR determinations under external supervision,” the report says.

The plaintiffs were backed by numerous left-leaning advocacy groups, including Public Justice, which filed an amicus brief in the case.

Other cases demonstrate a pattern of leading law firms, many of which donate mostly to Democratic politicians, according to Alliance for Consumers, arguing for settlements that install outside reviewers in businesses’ human resources decisions.

In Ellis, et al. v. Google LLC, three former Google employees filed a gender discrimination lawsuit alleging the company systematically underpaid women and assigned them lower positions than men. The 2022 settlement of the lawsuit mandated a $118 million payout and required Google retain a third-party expert to analyze hiring practices, hire an independent labor economist to review pay equity and submit to supervision by an external settlement monitor for three years.

The settlement illustrates how gender-discrimination class actions can be leveraged to install a permanent, outside bureaucracy to oversee hiring and salary decisions, according to Alliance for Consumers. It also “reflects a coordinated effort by ideologically aligned law firms and activist funders to bypass the democratic process and use the courts to impose progressive workforce policies on corporate America,” the report says.

“It is certainly true that some companies were more favorable to these outcomes,” Skinner told the DCNF. “It is also fair to say that some factions within these companies were likely rooting for these outcomes. But the overall effect of the lawsuits and the settlements was to drive DEI deeper into corporate America than would have otherwise been possible.”

The method of weaponizing labor lawsuit settlements to enforce racial hiring benchmarks has been ongoing for decades, according to Alliance for Consumers.

A racial discrimination labor lawsuit filed against clothing company Abercrombie and Fitch in 2003 became “a vehicle for a coalition of so-called civil rights organizations to extract race-conscious hiring benchmarks,” Alliance for Consumers says in its report.

The 2005 settlement in the case, which accused Abercrombie of discriminating against minorities and female employees, forced the company to install a vice president of diversity and hire 25 “diversity recruiters.” The settlement also affected advertising. Abercrombie was also required to “reflect diversity by including members of minority racial and ethnic groups” in marketing materials.

Following years of litigation, Kaiser Permanente reached a settlement of $11.5 million for 2,225 black employees who sued the health insurer for allegedly paying them less compared to non-black employees. Kaiser agreed to hire an outside consultant to ensure “African American employees’ compensation and opportunities for advancement are fair and equitable,” according to a 2021 press release. Kaiser also agreed to hire an outside consultant to review all pay and promotion decisions “with an eye toward equity and swift remediation of any existing disparities.”

The settlement “reflects a broader progressive legal network using employment litigation to institutionalize race-conscious workplace reforms through class action settlements rather than legislation or public rulemaking,” Alliance for Consumers said.

Alliance for Consumers is urging lawmakers and state attorneys general to recognize the “weaponization” of courtrooms to “pursue ideological transformation through the courts.”

“States should pass laws that shut off lawfare as a lucrative and viable path for trial lawyers and activists in their states,” Skinner told the DCNF. “From shutting off public nuisance litigation over lawful, licensed, regulated products, to removing the favored tools of activists and trial lawyers, there is a lot that conservative state legislatures and governors can do to protect their states against lawfare, but they have to act now, before it is too late.”