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On Sept. 30, the 11th U.S. Circuit Court of Appeals of Atlanta issued a 2-1 vote to temporarily block the Fearless Fund from granting women of color-led business critical venture capital (VC) funding, the Associated Press reported.
The appeal was granted after anti-affirmative action leader Edward Blum and his non-profit, the American Alliance for Equal Rights (AAER), filed an emergency motion to block the Black women-led VC firm from executing their Strivers Grant Contest — which awards a $20,000 grant and mentorship to Black female founders, helping them to grow and scale their businesses.
On Saturday, Judge Robert Luck and Andrew Brasher of the appeals court sided with Blum and the AAER arguing that the Fearless Fund’s “racially exclusionary program” was “substantially likely to violate” section 1981 of the Civil Rights Act of 1866. The federal law prohibits discrimination on the basis of race, color, and ethnicity when making and enforcing contracts “as is enjoyed by white citizens.” The application was set to close on Saturday, but after the appeal received a 2-1 vote, the grant contest was temporarily halted.
After the ruling, the Fearless Fund – founded by CEO Arian Simone and her partner Ayana Parsons in 2019 – vowed to continue on their “mission and commitment to address the unacceptable disparities that exist for Black women and other women of color in the venture capital space.”
“We strongly disagree with the decision,” the firm added in a statement Sunday. “The Journey Continues,” Simone penned on Instagram Oct. 1
Blum and AAER filed a lawsuit in August against the Fearless Fund. It’s one of three lawsuits issued by the conservative activist.
On Aug. 2, Blum filed a lawsuit against the Fearless Fund in the U.S. District Court of Atlanta, where it accused the firm of “operating a racially-discriminatory program that blatantly violates” section 1981’s guarantee of race neutrality under the Civil Rights Act of 1866. The legal strategist and the AAER claimed that the fund’s Strivers Grant Contest excluded eligible Asian and white candidates because of their race.
Blum gloated about the small victory after Saturday’s vote to temporarily block the Fearless Fund was announced.
“The members of the American Alliance for Equal Rights are gratified that the 11th Circuit has recognized the likelihood that the Fearless Strivers Grant Contest is illegal,” Blum said in a statement. “We look forward to the final resolution of this lawsuit.
The ongoing lawsuit is one of three suits filed by Blum’s non-profit this year that aims to dismantle programs designed to help people of color obtain career opportunities and financial support in the workplace and business world.
In late August, the AAER filed lawsuits against two law firms – Perkins Coie in Dallas and Morrison & Foerster in Miami – alleging that both entities discriminated against white candidates “by limiting which law students could be considered for paid fellowships designed in part to help support the recruitment of people of color,” Reuters noted.
Perkins Coie — a law firm based in Seattle — awarded stipends of up to $25,000 and paid summer associate positions to eligible candidates of color under their diversity fellowship. The program — which can help students obtain full-time employment with the company— was also made available to LGBTQ+ students and individuals with disabilities.
Morrison & Foerster — located in San Francisco — launched a similar program that awarded a $50,000 stipend and a paid summer associate position to successful Black, Hispanic, Native American and LGBTQ applicants. Like the Fearless Fund, Blum and AAER accused both firms of violating Section 1981 of the 1866 Civil Rights Act.
The appeal comes just a few days after the Fearless Fund won the first round of their ongoing legal battle against the conservative activist and his non-profit.
On Sept. 26, U.S. District Judge Thomas Thrash rejected Blum’s preliminary injunction to block the Fearless Fund from exclusively awarding funds to Black women-led founders and businesses.
During Tuesday’s hearing, Thrash argued that under the First Amendment, the Fearless Fund did not violate any constitutional laws by advocating for Black women-led business and VC funding through their Strivers Grant Contest and various initiatives, but Luck and Brasher — two judges formerly appointed under the Trump Administration — reversed Tuesday’s ruling on Saturday. The duo argued that the First Amendment did not give the firm the “right to exclude persons from a contractual regime based on race.”
SEE ALSO:
Fearless Fund: Atlanta Judge Blocks Anti-Affirmative Action Bid To End Grant Program For Black Women
