Illinois small business owner fights for equal treatment under the law

The COVID-19 pandemic was a brutal blow to small business owners. Entrepreneurs lost revenue, not only because of the virus but also because of the government’s confusing and constantly changing plans to mitigate its spread.

Cook County, Illinois—which encompasses Chicago and represents over 40 percent of all Illinois residents—offered entrepreneurs hope of relief: the Source Grow Grant, which would have provided $10,000 to struggling small businesses in a racially discriminatory manner.

Using $70 million from the American Rescue Plan Act (ARPA), the county created the grant program in 2021, accepted applications in October 2022, and was set to award grants in early 2023.

To be eligible, an applicant must have owned a for-profit business in Cook County that opened prior to 2020 and employed fewer than 20 full-time employees. The business must also have shown lower revenues or higher costs due to COVID-19, and the funds could be used only for business-related expenses. One more thing: All applicants for the grant must have identified their racial backgrounds.

It turns out that in addition to ARPA funding, the county also adopted a framework for that funding that would prioritize “historically excluded populations for selection, including People of Color, Women, Veterans, and Persons with a Disability.”

This meant any entrepreneur who didn’t belong to a “historically excluded population” couldn’t fairly compete for the grant.

Distribution of government benefits based on arbitrary racial classifications is unjust; treating individuals differently on the basis of race brings us back to a sad time in our nation’s history when governments sorted, indexed, and divided individuals by the color of their skin to deprive them of their liberty.

It’s also unconstitutional: The equal protection guarantee of the Fourteenth Amendment protects individuals from racial discrimination.

Represented by PLF free of charge, one small business owner fought back in a federal lawsuit to overturn Cook County’s unlawful Source Grow Grant program, restore their right to equality before the law, and level the playing field for all eligible entrepreneurs to compete for pandemic relief funds.

In March 2023, in response to our lawsuit, Cook County announced that it was scrapping the unconstitutional grant program. Although the County has not announced the terms of a new program, early reports indicate that it intends to award grants to businesses on a race-neutral basis.