A Houston bid contracting program aimed at leveling the playing field for minority and female business owners was declared unconstitutional by a federal judge Tuesday, prompting backlash from U.S. Congressman Christian Menefee, Harris County Commissioner Rodney Ellis and Interim County Attorney Abbie Kamin.
U.S. District Judge David Hittner said the program violates the Equal Protection Clause of the Fourteenth Amendment. As a result, Houston is now prohibited from using race-based preferences in awarding public contracts.
Since 1984, Houston has set contracting goals for businesses owned by minorities, women and small businesses. The city awarded $2.5 billion in contracts last year, and $579 million went to bidders certified through the Minority, Women and Small Business Enterprise program. Of those, 34 percent were Hispanic-owned businesses, 22 percent were Asian-owned, 17 percent were white women-owned and 14 percent were Black-owned.
Hittner’s ruling stems from a lawsuit filed in 2023 by Jerry and Theresa Thompson, a white Spring couple who owns Landscape Consultants of Texas. The Thompsons argued in court documents that they were unable to compete for a city project on equal grounds because they did not qualify for the MWSBE program.
The conservative pro bono firm Pacific Legal Foundation represented the plaintiffs and is also suing Harris County, demanding that its MWBSE program be halted. That case is pending in federal court.
The U.S. Supreme Court in 2023 ended race-conscious college admissions and Tuesday’s decision comes after Houston struggled to produce evidence supporting its contracting program. A disparity study conducted last year found Hispanic- and Asian-owned businesses were not disadvantaged in some contracting categories and recommended expanding race-neutral programs but the city council did not adopt those changes.
Menefee noted in a statement that affirmative action programs are facing mounting legal challenges nationwide and the ruling is an effort to dismantle initiatives that provide equal opportunities for minority- and women-owned businesses.
“This ruling is yet another step by far-right activists, like the lawyers who filed this case, fighting to erase every tool minority and women business owners use to compete on a level playing field,” he said. “They’ve fought to end diversity programs in our colleges, at corporations, and in government contracts. It’s a shame, and the Supreme Court of the United States has cleared the way for it to happen in ending affirmative action and gutting the Voting Rights Act.”
City Attorney Arturo Michel said Houston is evaluating an appeal and that Tuesday’s decision does not affect other Office of Business Opportunity programs such as those designed to help businesses owned by veterans, those with disabilities and members of the LGBTQ+ community.
Business advocates warned the decision could ripple beyond Houston. Earlier this year, small business owners sued Texas Comptroller Kelly Hancock for dismantling the statewide Historically Underutilized Business program, a similar initiative approved by the Legislature in 1999 to help businesses owned by veterans, women and minorities “get a fair shot” at contracts, Ellis said at an April press conference. That case is still pending and slated for trial in November.
On Tuesday, the commissioner said that historically marginalized businesses should be supported, not attacked, especially during an affordability crisis.
“I championed the city’s MWBE program more than four decades ago because the numbers confirmed what this community already knew: minority-owned businesses had been shut out of public contracting for generations,” Ellis said in a statement. “The disparities that were documented then still exist today. This decision lands hardest on many family firms and small contractors who spent decades working to earn a fair shot.”
Kamin issued a statement Tuesday night referencing the pending case against Harris County, noting that in the past four years, minority- and women-owned business participation in Harris County contracts increased from 9 percent to nearly 30 percent, with nearly $400 million of the $1.5 billion in program-eligible contracts being awarded to MWBE businesses.
“These outcomes reflect real opportunity for real businesses and the people they employ across our community, and we are proud of what the program has accomplished,” Kamin said. “The county takes seriously its obligation to operate programs in full compliance with the law. Our legal team is closely reviewing the current legal landscape, including this recent development, and evaluating all options. We believe there is a lawful and durable path forward that preserves meaningful opportunities for minority- and women-owned businesses while satisfying constitutional requirements, and we intend to pursue that path vigorously.”
