Chipotle shareholders re-elected in June Voted A compensation system was in place to reward executives for achieving DEI goals, but this year there were changes. Efforts To convince companies to stop the practice, Chipotle switched from rewarding executives for increasing the diversity of their workforce to rewarding them for reducing turnover among existing minority employees. While this may sound like a step toward ending discriminatory hiring practices, it is actually a major step backwards.
of goalIn Chipotle’s own words, this is to “improve the retention of diverse employees relative to non-diverse employees.” Note the word “relative.” Chipotle doesn’t just want to keep minorities longer, they want to keep them longer than non-minority employees.
How can they do that? Either by preventing minorities already at Chipotle from leaving, or by eliminating non-minorities, or both.
Neither of these looks good.
Let’s start with the second one: firing non-minorities. Don’t believe that this happens? Novant Healthwas sued for this very reason: One group, according to the lawsuit, went from seven white, male senior vice presidents in 2018 to two in 2019, one in 2020, and none in 2021. Some were fired with no explanation other than the tacit statement that the company wanted more “flashyness.”You can’t just fire white people.After the $3.7 million judgment was handed down, The Wall Street Journal ran a headline that read, “This Is a Terrible Verdict.”
And that’s not all. IBM’s Red Hat In May, the company was sued for firing 21 white men for failing to meet its DEI goals. Disney The company recently came under fire after a senior vice president was recorded saying there was “no way we’d hire a white guy” for a particular role.
The common thread? All three companies tie executive compensation to DEI goals aimed at increasing the percentage of diverse employees over non-diverse employees. Money, it turns out, is a powerful motivator, and some Chipotle executives have more than $250,000 in cash on the line.
The Supreme Court has long held that such discrimination is illegal. In Wygant v. Board of Education of Jackson (1986), a school district adopted affirmative action in hiring. But then there were firings. In an effort to preserve diversity, some white teachers were fired, even though they had more tenure. They sued and won.
As one judge explained, “When you fire a white person and hire a black person, the latter[s] It is illegal to hire a “reasonable percentage of employees” to promote diversity and provide role models for children, and it is equally illegal for executives to do so to line their own pockets.
Trying to “improve” relative retention is also problematic. It creates two classes of employees, one that is favored and the other that is not. When review time comes, who is likely to get praise and who is likely to receive honest, critical feedback? Who is the manager more likely to disappoint when it comes to handing out jobs, promotions, and paid time off? No rational manager would make a minority employee work through Christmas Eve when their own year-end bonus is on the line.
Chipotle’s policies leave certain groups effectively unmanageable. Are they late for their shift? Refuse to work nights or weekends? Are they a few dollars short at the register? Can managers keep diversity goals in mind while still doing their jobs? Certain employees become indispensable for all the wrong reasons.
Such discriminatory treatment is also illegal. Civil Rights Act Discrimination is prohibited not only in hiring and firing, but also in all terms, conditions, privileges, etc. of employment, including work schedules, promotions, vacations, disciplinary actions, transfers, mentoring, training programs, etc. Everyone should be treated equally. Always. Not doing so creates a harmful work environment for everyone.
But the real problem is that Chipotle’s policies are likely hurting the very people they’re meant to help.
Put yourself in the shoes of a recruiter. You have two candidates. One you can fire at will if it doesn’t work out. The other has terms attached that can be very powerful. You need to tread carefully with this employee – make sure they’re happy. If they quit, your boss won’t get a bonus and you could lose your job. Given this choice, which candidate seems more attractive?
It’s time for companies like Chipotle to stop this nonsense. No more racial hiring quotas, employee retention goals, or executive compensation incentives, so that we can once again enjoy a barbacoa burrito without the bitter taste of discrimination.
Matt Cole is Strive Asset ManagementJustin Danhof is Head of Corporate Governance at Strive.
The views and opinions expressed in this editorial are those of the author and do not necessarily reflect the official position of the Daily Caller.
