Ability, drive, money, luck: These are just a few of the many things that determine whether a small business is successful.
The business owners’ race, however, should never be on that list.
For too long in America, a person’s race, sex, religion, or sexual orientation played a major role in the type of life they were able to lead. While those immutable characteristics continue to influence people’s lives, the overt institutionalized discrimination that defined America for centuries has significantly diminished.
But in recent years, there has been a push to re-introduce discrimination into government policies and programs. While this discrimination is being championed in the name of righting past wrongs, its effect is the same: Americans being judged on their immutable characteristics.
A stark example of this trend came to light in 2021, when the Biden Administration and Congress permanently authorized the Minority Business Development Agency (MBDA). The MBDA offers support to small businesses across the country. But not every small business. The MBDA only serves African Americans, Asian Americans, Hasidic Jews, Hispanic Americans, Native Americans, and Pacific Islanders. Business owners of any other race need not apply.
While offering support to small business owners is a laudable goal, refusing to offer that same support to someone who isn’t a designated race is unconstitutional.
For years, the Wisconsin Institute for Law & Liberty (WILL) has been one of the nation’s leading voices against government discrimination in any form. So, when victims of the MBDA’s unconstitutional discrimination came to WILL, the team got to work.
The MBDA was first formed by Richard Nixon via Executive Order in 1969. But in 2021, the Biden Administration worked with Congress to permanently authorize the agency via the Infrastructure Act and increase its budget to $80 million for 2025.
The agency is tasked with “assisting minority business enterprises in overcoming social and economic disadvantages.” The MBDA has helped thousands of businesses over the years, but every time it uses race to decide which businesses to help, it violates the Constitution.
WILL has been a leader in fighting against discrimination in the courts. Since January 2021, they’ve represented 62 clients from 23 states fighting for equality under the law. Their reputation speaks for itself.
In 2023, three small business owners came to WILL after being turned down by the MBDA solely because of their race. WILL immediately saw that the MBDA was acting unconstitutionally, so they took them to court.
WILL’s clients were Christian Bruckner, a disabled Romanian immigrant who fled to the United States in the 1970’s to escape communism. Bruckner runs a contracting company in Florida. Second was Matthew Piper, who overcame extreme poverty to become an accomplished architect in Wisconsin. Third was Jeff Nuziard, a US Army veteran who owns and operates health and wellness centers in Texas.
All three of WILL’s clients were denied help from the MBDA because they weren’t one of the six races the MBDA serves.
In their lawsuit, WILL’s attorneys argued that the MBDA unconstitutionally used race as a determining factor for grants and services. The Supreme Court has ruled that while the government can consider race in specific situations, “Any racial classification subjecting a person to unequal treatment is subject to strict scrutiny. To withstand such scrutiny, the government must show that the racial classification is narrowly tailored to a compelling government interest.”
WILL’s case argued that the MBDA failed this strict scrutiny—and the judge agreed.
In his June 2023 injunction against the MBDA, Judge Mark T. Pittman called out the arbitrariness of the MBDA’s racial classifications:
“The Program is not narrowly tailored because it is underinclusive and overinclusive in its use of racial and ethnic classification… It is underinclusive because it arbitrarily excludes many minority-owned business owners—such as those from the Middle East, North Africa, and North Asia. For example, it excludes those who trace their ancestry to Afghanistan, Iran, Iraq, and Libya. But it includes those from China, Japan, Pakistan, and India. The Program is also underinclusive because it excludes every minority business owner who owns less than 51 percent of their business. This scattershot approach does not conform to the narrow tailoring strict scrutiny requires.”
America’s history of discrimination is an ugly reality that cannot be ignored. But as Chief Justice John Roberts stated, “The only way to stop discriminating on the basis of race is to stop discriminating on the basis of race.”
The Wisconsin Institute for Law & Liberty is fighting to end discrimination in every form. And thanks to them, small business owners needing a helping hand will now be able to receive it.
