A U.S. federal appeals court panel has ruled that the Fearless Fund grant program for Black women-owned businesses is discriminatory.
According to court documents obtained by CNN, the panel determined that the Fearless Fund’s Fearless Strivers’ Grant Contest is “substantially likely to violate” provisions of Title 42 of the U.S. Code, which guarantees equal rights under the law and prohibits racial considerations in awarding and enforcing contracts.
The ruling against the Black women-owned venture capital fund, which began last year, marks another victory for conservative groups waging a nationwide legal battle against corporate diversity programs, targeting numerous companies and government institutions.
The lawsuit, led by Edward Blum of the American Alliance for Equal Rights group, who is known for challenging affirmative action in college admissions, alleged that the Fearless Fund grant program, which explicitly targets Black women, is racially discriminatory.
Blum applauded the ruling, stating: “Grant programs that exclude certain individuals because of their race, such as the ones the Fearless Fund has designed and implemented, are unjust and polarizing.”
“Significant majorities of all Americans believe that an individual’s race should not be a factor in our nation’s public policies.”
Fearless Fund CEO and co-founder Arian Simone said the ruling was “devastating” for Black women everywhere.
“The message these judges sent today is that diversity in Corporate America, education, or anywhere else should not exist,” she said. “These judges bought what a small group of white men were selling.”
“I am shattered for every girl of color who has a dream but will grow up in a nation determined not to give her a shot to live it,” Simone continued.
“On their behalf, we will turn the pain into purpose and fight with all our might. America is supposed to be a nation where one has the freedom to achieve, the freedom to earn, and the freedom to prosper. Yet, when we have attempted to level the playing field for underrepresented groups, our freedoms were stifled.”
The appellate court ordered the suspension of Fearless Fund’s Strivers Grant Contest, which awards $20,000 to Black women-owned businesses, while the legal proceedings are ongoing. This 2-1 decision overturned a federal judge’s previous ruling from last year, which had allowed the contest to continue based on the expectation that the lawsuit would not succeed.
Nonetheless, the grant program has been on hold since October after a different panel swiftly approved Blum’s request for an emergency injunction, challenging the federal judge’s initial order.
“The majority ruled that an 1866 law designed to provide economic freedom to newly-freed slaves actually prohibits the Fearless Foundation from providing grants to Black women. We disagree,” said Alphonso David, Fearless Fund’s legal counsel and President and CEO of The Global Black Economic Forum.
“As the dissenting judge pointed out, the discrimination in access to funding that Fearless Foundation seeks to address is long-standing and irrefutable,” he continued.
“This is the first court decision in the 150+ year history of the post-Civil War civil rights law that has halted private charitable support for any racial or ethnic group. The dissenting judge, the district court, and other courts have agreed with us that these types of claims should not prevail. This is not the final outcome in this case; it is a preliminary ruling without a full factual record. We are evaluating all of our options.”
