Good morning, Broadsheet readers! Former OpenAI director Helen Toner reflects on the release of ChatGPT, Yale gets its first female president, and Hello Alice makes it out of a lawsuit over its grant program for Black business owners.
- DEI victory. Last year, Hello Alice fell victim to the wave of anti-DEI lawsuits filed in the aftermath of the Supreme Court's anti-affirmative action decision. The company that supports small business owners through an online platform and aims to get those businesses more capital was sued over a grant program funded by Progressive. The grant program offered $25,000 to 10 Black-owned small businesses to buy commercial vehicles. An Ohio federal judge dismissed the case last week.
"I feel relieved, I feel triumphant, I feel vindicated—all the words," says Hello Alice cofounder and president Elizabeth Gore.
The class-action suit, filed on behalf of white commercial trucker Nathan Roberts, alleged that the grant program racially discriminated because it was only open to Black business owners. Roberts sued both Hello Alice (legally known as Circular Board Inc.) and Progressive. The judge determined that her court did not have subject-matter jurisdiction in the case and that the plaintiff was not able to show any injury, as there was no guarantee he would have received any grant from Progressive; she dismissed both Roberts' claim and the class-action.
America First Legal, the firm representing Roberts, told Fortune that they have "noticed [their] intent to appeal and vindicate [their] client's rights." America First Legal is led by former Trump adviser Stephen Miller and has targeted "woke companies," per the New York Times. Progressive hasn't responded to request for comment.
Gore says that a victory for Roberts and America First would have set a dangerous precedent—one that prevents private companies from allocating capital as they see fit. While many of the other affirmative action decisions have involved public money, as in higher education, Hello Alice's grant programs involve private companies. The Progressive grants were one of its smaller programs; others include $500,000 in grant funding from eBay for small businesses and Etsy grants for creative entrepreneurs. Progressive's latest grant program for 2024 with Hello Alice is not exclusive to Black entrepreneurs.
Hello Alice has aimed to increase diversity in the American business supply chain, a critical yet sometimes unsexy piece of the movement for greater diversity in business. Gore argues that their programs have been successful—compared to efforts to get more capital in the hands of diverse founders in Silicon Valley—because "it's not new money." Major companies are already spending billions on trucking and other parts of the supply chain so it's not a matter of increasing their capital, but changing how they spend it.
Gore estimates that she's spent 70% of her time over the past year fighting this suit, from time in court to advocacy related to it. Hello Alice cofounder and CEO Carolyn Rodz has focused on running the business through the tumult. And while Gore acknowledges that the America First legal team plans to appeal, she says she's "calling this a win."
"It's a scary time to be a business owner, particularly one who values women and people of color," Gore says. Fearless Fund, for example, is still in court for the suit alleging its own grant program for Black women was discriminatory. "I had optimism and knew we were on the right side of history."
Emma Hinchliffe
emma.hinchliffe@fortune.com
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