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How Social Issues Affect Business Diversity

Sometimes, people's discomfort catalyzes oppositional efforts

Three years after her winning appearance on Shark Tank in 2014, Sara Margulis decided to move her growing honeymoon registry business, Honeyfund, from California to Florida because of the state's business-friendly reputation.

But that was before Florida Gov. Ron DeSantis signed House Bill 7 into law on April 22, 2022. Known as the Stop WOKE Act, it restricts workplace training or school instruction on diversity, equity and inclusion (DE&I). In a statement, the Republican governor said he was taking a stand against “woke indoctrination” that forces employees to attend diversity training programs that teach about white supremacy, privilege, and bias.

For Margulis, a female founder with a workforce that is 65 percent women and a very diverse clientele, the policy is problematic. She believes it muzzles free speech protected by the First Amendment, prevents her from providing DE&I training and instruction to her staff and is morally unconscionable. She joined other employers in a lawsuit against the governor, the attorney general and the state’s human relations commissioners. The lawsuit was filed by Protect Democracy, a nonprofit, nonpartisan organization that fights rising authoritarianism in the United States, and pro bono attorneys at Ropes & Gray LLP. In August, a federal judge agreed that the law violated the First Amendment and blocked it as unconstitutional. The state has appealed this ruling.

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