Icahn Capital and Bausch + Lomb Face $221M Bias Lawsuit Over Board Exclusion

A money manager at Carl Icahn's investment firm has filed a lawsuit against his employer and Bausch + Lomb, accusing the company of anti-White bias in its corporate governance practices. Steven Miller, a former Icahn Capital employee, claims he was excluded from a board seat at Bausch + Lomb due to a diversity requirement that allegedly discriminated against White candidates according to reports. The suit, filed in a Florida federal court, seeks at least $221 million in damages, alleging violations of civil rights protections against race-based discrimination.

According to the complaint, Miller was a preferred director candidate for Icahn Capital and had previously secured board roles at other publicly traded companies. However, he was passed over in favor of a fellow money manager who met the company's diversity criteria. Miller argues that this decision violated both Title VII of the Civil Rights Act of 1964 and Section 1981 of the U.S. Code, which prohibit racial discrimination in employment and contractual agreements according to the complaint.

The case has drawn attention due to its potential implications for corporate diversity and inclusion initiatives, particularly in the wake of renewed political focus on such programs. Corporate boards have increasingly emphasized diversity in recent years, but the lawsuit highlights the legal and ethical tensions that can arise when such efforts are perceived as discriminatory. The firm behind the suit is America First Legal, an organization closely associated with the Trump administration.

How the Case Unfolded

The dispute arose after Icahn Capital took a significant stake in Bausch + Lomb, the eye health company, in 2021. At the time, Miller was appointed to the board of Bausch Health, Bausch + Lomb's parent company. However, when Bausch + Lomb established its own board following an initial public offering a year later, Miller was not included. Instead, the board selected Gaoxiang "Gary" Hu, a non-White candidate, as one of the two representatives from Icahn Capital according to reports.

The lawsuit alleges that the decision was guided by a private agreement between Icahn Capital and Bausch + Lomb that required one of the two board nominees to be "diverse." This requirement, the complaint argues, was not disclosed to U.S. financial regulators and was used to exclude Miller from the board according to the complaint. The case also names Carl Icahn and his son Brett as defendants, both of whom are currently serving on Bausch + Lomb's board.

Corporate Diversity in the Crosshairs

The case has reignited debates about the balance between diversity goals and equal opportunity in corporate governance. While many companies have adopted diversity mandates to address historical underrepresentation in leadership roles, critics argue such policies can lead to reverse discrimination. The Trump administration has previously criticized diversity, equity, and inclusion (DEI) initiatives as politically motivated and discriminatory.

This lawsuit also underscores the broader legal risks companies may face when implementing diversity-focused policies without clear safeguards against discrimination claims. Corporate legal teams are now paying closer attention to how such initiatives are communicated and enforced, particularly in high-stakes board appointments.

What This Means for Investors

The legal battle could have significant financial and reputational consequences for both Icahn Capital and Bausch + Lomb. A ruling in favor of Miller could set a precedent that complicates future diversity efforts in corporate America, particularly for firms that align with activist investors. Conversely, if Bausch + Lomb's approach is upheld, it could reinforce the legitimacy of diversity initiatives as a tool for fostering inclusive leadership.

For investors, the case highlights the growing intersection of corporate governance and social policy. Companies that prioritize diversity are often lauded for their ESG (Environmental, Social, Governance) credentials, but this lawsuit suggests that such efforts must be carefully managed to avoid legal pitfalls. The outcome may also influence how activist investors negotiate board seats in publicly traded companies.

Ongoing Legal and Political Tensions

The timing of the lawsuit is notable, coming just months after the Trump administration retook office and began rolling back many Biden-era DEI policies. The case aligns with a broader political movement to challenge corporate diversity programs, with several recent lawsuits alleging anti-White bias in hiring and board appointments.

As the legal process unfolds, the case will likely attract scrutiny from lawmakers, corporate leaders, and advocacy groups on both sides of the diversity debate. For now, all parties remain silent. Neither Bausch + Lomb nor the Icahns have commented publicly, and Steven Miller has not responded to requests for comment.