Upon winning this year’s Academy Award for best actress, Frances McDormand closed her acceptance speech with a strong sense of finality and a whiff of mystery. “I have two words to leave with you tonight, ladies and gentlemen: inclusion rider,” she said to a mostly confused television audience (as well as the celebrities packing the Dolby Theater in Los Angeles that night).
While millions of TV viewers probably were not surprised that the outspoken McDormand had something controversial to say, most no doubt were stumped by the specifics. For many Americans—and U.S. employers—the inclusion-rider mention didn’t exactly hit home.
Developed by the Annenberg Inclusion Initiative at the University of Southern California by Stacy Smith (with help from the law firm of Kalpana Kotagal), the intiative defines the inclusion rider as “an addendum to a contract that creates conditions for more equitable casting and hiring, focused on developing a diverse talent pipeline in the entertainment industry. This contractual language represents a crucial step in eliminating exclusion of underrepresented or marginalized groups.”
“The real goal is to counter bias in the auditioning and casting process,” Smith told The Guardian right after the Oscars, adding that A-list stars can take advantage of inclusion riders to ensure proper representation and inclusion of women, people of color, the LGBT community and those with disabilities.
“The goal is that talent can take the inclusion rider and adopt it in ways that make sense for their values and their beliefs,” she said. Soon after the broadcast, stars and directors including Matt Damon, Ben Affleck and Paul Feig announced they would adopt inclusion riders in upcoming projects.
Because it is created specifically for the entertainment industry, with its unique hiring structure (and dependence on star power), employment-law experts see little direct connection between inclusion riders and the ongoing challenge of achieving increased workforce diversity by employers. In fact, experts say inclusion riders could get most employers into legal hot water. Rather, it’s the spirit of the inclusion riders that can drive workplace diversity change.
Joshua A. Rodine, a partner in Seyfarth Shaw’s Los Angeles office, likened inclusion riders to the more commonly known NFL Rooney Rule, which requires teams to interview minority candidates for head coaching and senior football operation jobs—with the intent to create equal opportunity for all applicants.
“The idea is that high-powered actors can demand [through inclusion riders] that both the cast and those working ‘below the line’ [the crew] demographically reflect society,” Rodine says.
For most employers, however, an inclusion rider is a non-starter. Rodine explains that in the 2009 Ricci v. DeStefano case, the U.S. Supreme Court concluded that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.”
In other words, hiring quotas are permissible only if an employer needs the quota to avoid being accused of having facially neutral hiring practices that have an unintended disproportionate impact on a particular [protected] demographic segment of the population, Rodine says.
“Demanding that an employer hire at specified diversity levels would almost certainly fly in the face of Ricci, and an employer would accommodate such a rider at its legal peril,” Rodine says.
McDormand’s acceptance speech, however, can inspire diversity conversations about hiring in every industry. Rodine cautions that if an employer is evaluating a demand for an inclusion rider, the employer must keep the Ricci decision in mind. Is the demand that the employer must impose a hiring quota, or is the demand that the employer intentionally expand interviewing and employment opportunities for diverse candidates?
“While the latter approach can be defensible,” he says, “the proverbial curtain will almost surely drop on the former practice as soon as it begins.”
Wendy Lane, a partner at Greenberg Glusker in Los Angeles, says she has not seen inclusion riders used in industries outside of the world of entertainment, with its unique hiring structure.
“By and large, a quota is illegal,” she says. “They are barred by Title VII and subsequent case law.”
There are better ways for more typical employers to manage the diversity issue without running afoul of the law, Lane says.
In terms of diversity, she says, employers often downplay the raw numbers, although diversity data are important. Rather, they should look at the diversity that already exists within the company workforce and make certain that those employees are given an equal opportunity to shine. Examples of this could include making sure that female engineers are getting the opportunity to work on the big projects, or a person of color is getting the opportunity to go on client pitches, she says.
“It’s those kinds of situations where the recent discussion of inclusion riders makes it attractive for companies that already wanted to talk about the diversity issue,” she says. “If nothing else, Ms. McDormand’s comment focuses attention to the ongoing challenge of diversity.”
Lane says the biggest takeaway with the inclusion rider’s sudden notoriety is that the overall philosophy can be applied to any industry. What it will take is those with real power—for example, the biggest rainmaker, star performer or top-level manager—to lead the way by action.
“It’s important for the people at that level to demand and to incorporate issues of inclusivity and diversity if we’re going to see change,” she says. “They have to make it happen. In the U.S., it’s still white men who are the predominant people in power making those hiring decisions, and they have to lead the way.”