In a split decision Monday, the Eleventh Circuit said that a Georgia federal judge should have blocked a Black-led venture capital firm from awarding grants to businesses owned only by Black women, opining that the practice was “substantially likely” to violate federal law barring racial discrimination in the writing of contracts.
U.S. Circuit Judge Kevin Newsom, writing for the court, said that Fearless Fund Management LLC’s Fearless Strivers Grant Contest had stepped well beyond the bounds of First Amendment protections by refusing to award grants to applicants who were not Black females.
And because Fearless’ own documentation for the grant application plainly states its rules “are a contract,” Judge Newsom added, the provision is unenforceable under Section 1981 of the Civil Rights Act of 1866, which affords all Americans the same rights and benefits regarding contractual relationships.
The judge compared the grant process to a white business owner’s decision to fire all of his Black employees, an equally untenable position.
