Black Businesses Face Uphill Battle After Reverse Racism Ruling From Trump-Appointed Judge

Earlier this month, a federal court delivered yet another blow to government efforts to close the racial equity gap and better serve Black and brown communities.

The latest set back came by a ruling from Judge Mark Pittman that ordered the Minority Business Development Agency (MBDA) to no longer consider race or ethnicity when deploying its services to U.S. small businesses. 

“This is not one attack, but it’s a series of attacks on the measures that the federal government has put in place to remedy,” Patrice Willoughby, senior vice president of global policy and impact at the National Association for the Advancement of Colored People (NAACP), told theGrio.

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Using the same constitutional argument the U.S. Supreme Court used to overturn race-conscious affirmative action in college admissions last year, Pittman, appointed to the U.S. District Court of the Northern District of Texas by former President Donald Trump, said MBDA’s qualification for “disadvantaged” business owners violated the 14th Amendment’s equal protection clause.

In other words, the judge argued the agency violated the constitutional rights of white business owners.

“While the agency’s work may help alleviate opportunity gaps faced by MBEs (minority business owners), two wrongs do not make a right,” Pittman wrote in his ruling.

Elected officials and advocates are decrying the federal court ruling, blaming a movement led by conservatives and affirmed by Republican-appointed judges that is undoing decades-long efforts to right historic wrongs that have afflicted Black and brown communities. The MBDA ruling, proponents fear, could further exacerbate existing racial disparities in ownership and wealth.

“We should really look at these as the pushback against Black economic progress,” said Willoughby, a former executive director of the Congressional Black Caucus. “It’s very clear that, because discrimination continues to exist, these programs are still needed.” 

The mission of the Minority Business Development Agency is to promote the growth and competitiveness of U.S. minority-owned businesses. MBDA provides minority business owners access to capital, contracts and consulting services. Ironically, the agency was established by Republican President Richard Nixon in 1969. Under President Joe Biden, a Democrat, it became a permanent agency under federal law that expanded its reach across the country.

White House Press Secretary Karine Jean-Pierre told theGrio that Biden is “very proud” of signing into law a permanent government status for MBDA. 

White House Press Secretary Karine Jean-Pierre talks to reporters during the daily news conference in the Brady Press Briefing Room at the White House on March 27, 2023 in Washington, D.C. (Photo by Chip Somodevilla/Getty Images)

“We’ve seen 16 million applications that were started under this administration over the past three years, which is important,” the Biden spokesperson shared. “There was certainly a boost … with minority businesses starting their small businesses.”

Now that MBDA will be required by law to open its programs to white business owners, experts fear it would lead to already existing patterns of implicit or explicit racial bias and further exacerbate the racial wealth gap.

“What you will have is essentially people do business with people they like,” Willoughby explained. “They want to drive visibility for who is able to benefit underground so that there’s no oversight, no regulation, and there’s no assistance more broadly, with respect to DEI.”

Samantha Tweedy, CEO of the Black Economic Alliance, said the judge’s ruling would “result in an MBDA unable to support diverse business owners navigating an economic system that research shows is riddled with racial bias.” 

“We know that is the goal of many who seek to claw back the pathways to economic progress open to the Black community,” said Tweedy, who called on Congress and the White House to “step in to protect the vital role of the MBDA.”

To date, “reverse racism” rulings that undo race-specific programs aimed at remedying racial disparities have hit college campuses, businesses, and even Black farmers. Conservative activists have largely filed these cases, including millionaire Edward Blum, who was behind the affirmative action case before the Supreme Court. Blum is also behind a pending lawsuit against the Black female-owned Fearless Fund, arguing that its program designed to boost funding for Black women entrepreneurs is discriminatory against white-owned businesses. 

“You remove the legal framework that allows them to challenge discrimination,” Willoughby explained about the growing number of legal challenges against DEI. She said success in courts “emboldens the opponents of equity” and turns back the clock on racial progress.

“Essentially, [they] are trying to return America to what these opponents referred to as the good old days, but really were a white supremacist framework,” noted Willoughby, “which Black businesses and people of color really had very little access to the benefits of this country that other people have enjoyed.”

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According to a February 2024 report by the Brookings Institution, while Black businesses saw consecutive growth between 2017 and 2021, the number of Black-owned employer firms remains disproportionate to the number of Blacks living in the United States. In 2021, Black Americans represented only 2.7% of employers despite making up 14.4% of the population. Closing that gap, the report argues, would boost the U.S. economy and create thousands more jobs.

Looking ahead at combating the legal setbacks on DEI-related programs, Willoughby told theGrio that policymakers, researchers and litigants will have to double down on data collection and advocacy. Proponents of DEI programs will have to make “better arguments in the courts” and “firmer justification for the existence of any remedy where race is a linked with disadvantage.”

“It’s going to become a lot more important to collect the data, to document the discrimination, and to prove that the disadvantage is directly linked to race,” she said.

The current legal setbacks also reflect the fact that elections have consequences. In addition to Pittman being appointed to his judgeship by Trump, so were the three Supreme Court justices who joined the majority to strike down race-based affirmative action.

“Now that court, which is hostile to issues involving race and racial remedies, will be in operation for the next decade,” Willoughby said. 

“Voting is connected to Black progress,” she added. “Even if you are feeling disconnected, you still have to look at who has your interests at heart and vote with your pocketbook to identify the candidates that are going to shore up your participation in the economic system.”

Gerren Keith Gaynor is a White House Correspondent and the Managing Editor of Politics at theGrio. He is based in Washington, D.C.

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