The American Alliance for Equal Rights has filed a lawsuit against Founders First Community Development Corporation, alleging that its “Texas Job Creators Grant” discriminates against applicants on the basis of race by excluding white contractors.

According to Fundid, the program awards grants ranging from $1,500-$10,000 to minority- or LGBTQ-founded companies to assist in improving business equipment or hiring new “premium wage” staff.

To qualify for funding, a company must be “founded by an entrepreneur who identifies as a minority, LGBTQIA+, military veteran, a woman or is located in a low-to-moderate income area.” The accompanying questionnaire requests an applicant’s gender identity and whether or not he or she identifies as a person of color.

The lawsuit by AAER alleges that the grant program violates the Civil Rights Act of 1866, among other legislation, through its exclusion of white applicants.

“These restrictions mean that all Asians, blacks, and Hispanics can always apply, but many whites can never apply,” AAER stated in a Tuesday press release. “Because Founders’ contest is a contract that discriminates on its face, it violates the law.”

Another point of contention AAER raised was that the contest winners and grant recipient companies are required to give up personal data.

“As highlighted in the complaint, the Texas Jobs Creators Grant awards tens of thousands of dollars to contestants each year,” the press release reads. “In exchange for being awarded the prize, Founders First Community Development Corporation requires that all contestants must complete a months-long class; license away their personal data; and give it their intellectual property, financial records, and more.”

AAER President Edward Blum said that civil rights laws in the United States do not permit racial discrimination just because some racial groups are overrepresented in various fields while others are under-represented.

“Programs, contracts, employment opportunities, contests, and other areas of our nation’s public policies that are racially exclusive like the one offered by the Founders First Community Development Corporation are unfair and illegal. Programs like this one will be vigorously challenged by AAER in federal and state courts throughout the country,” he added.

Will Biagini

Will was born in Louisiana and raised in a military family. He currently serves as a journalist with Texas Scorecard. Previously, he was a senior correspondent for Campus Reform.