The Cost of Discrimination – From Boardrooms to Courtrooms

In this study, an IDS-funded team examines the intricate dynamics between employee diversity, employer discrimination, and their shared impact on firm performance. Compiling a database linking discrimination lawsuits to business outcomes, the study aims to uncover the intricate effects of diversity practices on corporate success. By connecting the dots between legal challenges and business metrics, this research stands to contribute to a more inclusive economic environment.

As with the rest of the country, American workplaces are becoming more diverse. Appreciating the value of workforce diversity, as such, has never been more critical. Indeed, as this study demonstrates, that “value” can be meant literally – as can the costs of employer discrimination. Our research endeavors to dissect how these competing elements – diversity and discrimination – not only coexist within firms but also how they significantly influence firm performance and innovation.

To achieve this, we are compiling a large-scale database that combines information from employment discrimination court cases with data on firm diversity and performance metrics. This ambitious project will contribute to the scientific dialogue surrounding the effects of employee diversity and discrimination litigation on business success.

Ultimately, our goal is to leverage the insights gained from this initial study to secure additional support from major funding bodies, including the National Science Foundation, the Department of Labor, and various private foundations. Through this multifaceted approach, we aim to uncover how the nuances of workplace diversity and the shadows of discrimination can shape the landscape of firm innovation and overall performance.

This initiative not only has the potential to illuminate the tangible benefits of fostering a diverse workforce but also to highlight the economic and innovative penalties firms might face in light of discrimination disputes. By connecting the dots between legal challenges and business metrics, this research stands to inform policy, guide corporate strategy, and contribute to a more inclusive and productive economic environment.