Coca-Cola Under Fire for Legally Questionable Racial Quota System

(Photo by John Li/Getty Images)
April 28, 2021

An anti-discrimination group is challenging Coca-Cola’s attempt to impose racial quotas on outside counsel.

Writing on behalf of the Project on Fair Representation, D.C. attorney Boyden Gray accused Coca-Cola of violating the Civil Rights Act with a new rule, which would punish contracted law firms unless a certain percentage of their billed associates are "diverse attorneys."

In the letter, a copy of which was obtained by the Washington Free Beacon, Gray argues that policy violates federal law, which "prohibit[s] all forms of racial discrimination in private contracting." Coca-Cola "appears to be following the view of ‘antiracist’ activist Ibram X. Kendi," with their new requirement, Gray writes.

Former Coca-Cola counsel Bradley Gayton, who last week was appointed to serve as a strategic consultant to the company's CEO, announced in January that law firms partnering with Coca-Cola would face a 30 percent reduction in payment unless 30 percent of the firm's billed associates and partners came from diverse backgrounds. Half of those associates must also be black.

While the practice may have been implemented with good intentions, quotas "perpetuate" racial categorization, Gray told the Free Beacon.

"Coke’s outside counsel policy may be well-intentioned, but racial quotas and the notion of group rights perpetuate pernicious racial categories and rest on a false, offensive, and racist notion that blacks and other racial minorities cannot compete," Gray said. "Federal law prohibits this kind of racially discriminatory balancing. It is not enough for Coke to pause this policy; it needs to publicly revoke it. Coke should disavow race-based contracting, period."

Gray is acting on behalf of the Project on Fair Representation, a nonprofit legal group that fights racial and ethnic discrimination. The group’s president, Edward Blum, told the Free Beacon he believes the company must withdraw the rule immediately.

"It is obvious to all observers that Coca-Cola's recently enacted law firm contracting policies are illegal. The company should publicly withdraw these racial quota requirements immediately."

Blum helped organize Students for Fair Admissions’ lawsuit against Harvard, which claims the university discriminates against Asian-American applicants. The group recently petitioned the Supreme Court to take up their case. Blum is also the architect of Fisher v. University of Texas, the last case that mounted a frontal attack on affirmative action before the High Court.

Federal law bans race discrimination in private contracting, as Gray’s letter notes. Lawsuits regarding contract discrimination go straight to federal court, unlike others that first must go through a years-long agency process. And unlike other anti-discrimination laws, there's no cap on monetary damages under the fair contracting. Coca-Cola could be on the hook for a hefty financial penalty.

The soda company landed in hot water in February after leaked documents from an internal diversity and inclusion training session asked workers to "be less white." Coca-Cola did not respond to the Free Beacon’s request for comment in time for publication.

Kevin Daley contributed to this report.