Court Halts Black-owned Firm’s Grants Exclusively for Black Women Entrepreneurs

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In a noteworthy legal twist, a federal appeals court in the U.S. has temporarily halted a Black-owned venture capitalist firm from exclusively awarding grants to Black women entrepreneurs. The injunction was demanded by the American Alliance for Equal Rights, a conservative organization, and granted by the 11th Circuit Court of Appeals in a 2-1 verdict. This decision halts the Fearless Fund, a venture capitalist firm spearheaded by Black women, from bestowing its Fearless Strivers Grant solely on Black women.

The conservative alliance argued that these grant allocations are in violation of Section 1981 of the U.S. Code. This legislation ensures the right of all individuals to make and enforce contracts without discrimination based on race, within the jurisdiction of the United States.

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The majority opinion written by Judges Robert Luck and Andrew Brasher asserted that the Fearless Strivers Grant Contest implemented by the Fearless Fund is likely to breach the law, thereby reversing a lower court’s judgment. The lower court had previously defended the grant as constitutionally safeguarded by the First Amendment. This standpoint was refuted by the appellate judges, highlighting that while the First Amendment allows for the propagation of racial beliefs, it does not sanction racial exclusion from contractual agreements.

As a result of this injunction, the Fearless Fund has been asked to interrupt the grant selection process for the duration of the litigation. This decision propels the numerous lawsuits instigated by Edward Blum, a conservative activist, who had previously led to the removal of affirmative action in colleges and universities.

Blum, the founder and president of the American Alliance for Equal Rights, acknowledged the verdict, awaiting the final resolution in the lawsuit. The judges who endorsed the injunction were both appointed by former President Donald Trump. Conversely, Judge Charles Wilson, appointed by former President Bill Clinton, resisted the injunction.

Judge Wilson proffered caution to the appellate judges, encouraging reverence for the decisions made by lower courts. He emphasized the importance of considering historical and socio-political contexts like the Civil Rights Act of 1866 that was designed as a remedial mechanism to ensure basic economic rights for the Freedmen.

Judge Wilson contended that applying the law against the Fearless Fund’s remedial program is a distortion of Congressional intention. He warned of the irreparable damage inflicted upon Black women, not the plaintiff, if the injunction was granted.

Fearless Fund, established in 2019, is a company devoted to dismantling the barriers that Black women encounter in acquiring resources and funding for their businesses. The firm has many corporate partners that include Bank of America, JPMorgan Chase, Fifth Third Bank, and Mastercard. Fearless Fund’s affiliated nonprofit organisation, Fearless Foundation, provides charitable donations and grants to female entrepreneurs of color, as observed by its co-founder and COO Ayana Parsons. The specific grant in question extends up to $20,000 solely to Black women entrepreneurs.