Brazilian Retailer Faces Suit Over High Potential Program Exclusively for Blacks

November 17, 2020

A branch of Brazil’s Public Attorney’s Office filed suit to suspend an employee training program of one of Brazil’s largest retailers on the grounds that the company’s decision to temporarily limit the program to black applicants violates the Brazilian constitution and anti-discrimination law. 
In September, Brazil’s Magazine Luiza announced the company would be temporarily limiting applicants to its high potential trainee program to black applicants in effort to increase representation of black Brazilians in leadership positions.  The company noted blacks make up 53% of the operational staff yet only 16% of leadership positions with no representation on the board or executive committee. 
The Brazilian Federal Constitution prohibits “any form of discrimination” and other laws stipulate it is a “crime of racism to refuse or hinder job applications ‘based on race or [ethnic] discrimination.’”  However, affirmative action, including recruiting programs have been deemed permissible under Brazilian law.  Indeed, the Labor Branch of the Brazil’s Public Attorney’s Office declined to investigate on the grounds of the Office’s support for affirmative action and recruiting programs.   
However, as Veirano’s José Carlos Wahle and Luiza Lemos write, the announcement of the program spurred wide commentary on social networks.  Subsequently, a different branch of the Public Attorney’s Office charged with matters of “collective interest in the federal or international spheres” opened a case seeking to suspend the program on the grounds it violates Brazil’s Constitution and anti-discrimination laws. 
According to Mr. Wahle and Ms. Lemos, although there are not many Brazilian Labor Court decisions on this topic, there are Brazilian Supreme Court cases which address affirmative action-style programs at public universities.  They state that these cases apply in employment law situations and indicate Magazine Luiza’s program is both justified and legal.  In upholding affirmative action programs in higher education situations, Brazil’s Supreme Court looked for real evidence of underrepresentation of a specific group. 
The authors note that with respect to Magazin Luiza, not only is there a large wage disparity societally in Brazil between whites and blacks, but the company also cited its own representation statistics and noted that blacks would not even apply to the program previously.  According to Mr. Wahle and Ms. Lemos, companies looking to adopt similar programs in Brazil should:
  1. Have evidence of the underrepresentation of the minority group which will benefit from the program
  2. Make the program temporary; and
  3. Clearly publicize the temporary nature of the program.   

HR Policy Global will continue to monitor these types of programs in Brazil and in the larger Latin American region.