MBN USA

April 04, 2024

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Federal judge in Texas says MBDA must offer aid to all races

To help the NMSDC network better understand the ruling of the Federal District Court in Texas on the Minority Business Development Agency (MBDA) and some of its implications, we invited three distinguished experts to join NMSDC CEO and President Ying McGuire in dialogue:

Alphonso David, president and CEO, Global Black Economic Forum.

Damon Hewitt, president and executive director, Lawyers Committee for Civil Rights Under Law. 

Sarah Von Der Lippe, pro bono counsel, Minority Business Enterprise Legal Defense and Education Fund, Inc.

NMSDC opened the panel by reiterating its strong commitment to support the MBDA and the critical business and supplier diversity efforts that are key to growing minority business enterprises (MBEs). After a brief introduction, the panelists discussed the recent court ruling and its ramifications for NMSDC and its network of partners. Important highlights include:

The court acknowledged that minority-owned businesses face discrimination in both credit markets and federal contracting, however, the court eliminated remedies for this discrimination.

This decision only applies to one federal agency and one federal statute.  It does not apply to local, state, and other federal programs nor does it affect private sector supplier and business diversity programs.

The experts on the panel then provided much-needed framing and context of the ruling and the current legal environment including:

This case is part of a continued pattern of litigation aimed at undermining government efforts focused on removing barriers for minority businesses, explaining that attacks on these programs have been going on for over 45 years, in many cases since the programs were first launched.  The attacks are not only focused on explicitly race-conscious programs but also target race-neutral programs such as the SBA 8(a) program.

The attacks are part of a larger effort to strip marginalized communities of all the protections of law and it is important to focus on the interconnected nature of attacks on voting rights, reproductive rights, minority business programs, and other related issues.

These programs work and the attacks represent a cynical effort to undo the recent progress minority businesses have experienced.

The equal protection clause of the 14th Amendment, which was intended to protect Black communities in the wake of slavery and Civil War Reconstruction, is now being used to disenfranchise.

Historically, government efforts to combat discrimination have had broad bipartisan and public support — something that is still the case today.

The current challenges are part of a highly coordinated effort that has been years in the making and is being primarily led by a small group of well-funded, well-connected, and highly coordinated organizations.

The webinar also highlighted some next steps for pushing back against these attacks:

Corporations should use this moment as an opportunity to double down on voluntary supplier and business diversity activities. The ruling does not apply to these types of programs and is an opportunity for the private sector to take the lead in minority business development.

MBEs should contribute to evidence-building by coming forward to document their experiences of discrimination and their resilience despite those barriers.

The importance of participating in and supporting funding for local and state disparity studies.

The panel concluded with NMSDC CEO and President Ying McGuire passionately calling on the network to come together to support the MBDA, their regional centers, MBEs, corporate members, and all those working to battle discrimination and help grow minority businesses.