Houston sued over program setting aside public contracts for minorities

FILE PHOTO: The skyline of downtown Houston is seen

By Daniel Wiessner

(Reuters) - A white married couple that owns two landscaping companies has sued Houston, claiming that the city's requirement that certain government contracts be set aside for minority-owned businesses runs afoul of the U.S. Constitution.

The two businesses owned by Jerry and Theresa Thompson in a complaint filed in federal court in Houston on Tuesday said the city's program violates their constitutional rights to equal protection. The city has said that the four-decade-old program ensures that historically disenfranchised people have an opportunity to participate in lucrative government contracting, and fosters a more competitive economic environment.

The lawsuit is the latest to challenge affirmative action programs since the U.S. Supreme Court in June struck down race-conscious policies in college student admissions in rulings involving Harvard University and the University of North Carolina. The suit was filed on the same day that an anti-affirmative action group sued the U.S. Military Academy at West Point, claiming the Army school's affirmative action practices unconstitutionally discriminate against white applicants.

Under Houston's program, the city sets annual numerical goals for awarding different types of contracts to businesses owned by minorities. Between July 2021 and June 2022, about 24% of professional service contracts and about 14% of construction contracts were awarded to minority-owned businesses, according to the city.

The office of Houston Mayor Sylvester Turner, a Democrat, did not immediately respond to a request for comment.

The lawsuit said one of the Thompson businesses currently has a five-year contract with the city worth $1.3 million, but is required to subcontract 11% of the total value, or $143,000, to a minority-owned business.

The Thompsons are represented by the conservative Pacific Legal Foundation, which said that racial set-asides feed into stereotypes that some racial groups cannot succeed without government help.

The lawsuit also alleges that Houston failed to explain how its contracting program is tailored to remedy past discrimination. The Supreme Court previously has said affirmative action programs can be deemed unlawful without such an explanation.

The June Supreme Court ruling, while directly affecting only higher education, is expected to bolster legal challenges to various government programs and corporate workforce diversity initiatives.

In July, a federal judge in Tennessee cited the decision in ruling that the U.S. Small Business Administration could not assume that minority business owners were "socially disadvantaged," making them eligible to bid on certain government contracts, without requiring them to provide any evidence beyond their race.

(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Will Dunham)