A judge struck down a provision of a federal program meant to help minority-owned businesses, a ruling that could imperil other programs that benefit underrepresented groups.
Thousands of Black, Latino and other minority business owners are scrambling to prove that their race puts them at a “social disadvantage” after a federal judge declared a key provision of a popular Small Business Administration program unconstitutional, extending the U.S. Supreme Court’s recent retreat from affirmative action.The SBA’s 8 Business Development program was meant to open a pipeline to billions in government contracting dollars for historically disadvantaged groups.
“I had a lot of initial calls from clients, from blog readers, from contractors across the board, asking: ‘What does this mean?’” she said, adding that she has seen a “massive influx” of businesses needing help with crafting the essays.Approximately 4,800 businesses participate in the 8 program, and nearly 4,000 of them were certified under the presumption of social disadvantage, according to the SBA.
The upending of the 8 program marks one of the first casualties in the business world of the Supreme Court’s landmark decision holding that race-conscious admissions programs at Harvard and the University of North Carolina violate the Constitution’s guarantee of equal protection. The 8 program’s reliance on the presumption of social disadvantage was similarly unconstitutional, District Judge Clifton L. Corker wrote in his July 19 order enjoining the SBA from using the presumption.
That a judge struck down the SBA’s use of the presumption of social disadvantage “wasn’t completely surprising to us because we’ve known that there’s been a number of cases that have been brought [and] funded by conservative legal foundations that have always questioned any affirmative action,” said Antonio Franco, managing partner at PilieroMazza, based in Washington, which works with government contractors to apply for the 8 program.
Filed against both the U.S. Department of Agriculture and the SBA, the lawsuit claimed that Ultima lost out on USDA contracts that went instead to businesses participating in the 8 program. Because Bennett did not benefit from the presumption of social disadvantage, she argues that the program discriminated against her.
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