Active: Federal lawsuit filed to stop racial preferences in COVID-19 relief grants for small businesses.

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 provides $10,000 to struggling small businesses.

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

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

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

This means any entrepreneur who doesn’t belong to a “historically excluded population” cannot 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 is fighting 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.

What’s At Stake?

  • Cook County, Illinois, cannot use arbitrary racial distinctions to disfavor individuals for government benefits. COVID-19 relief is no exception. Racial discrimination is not only unjust but also unconstitutional under the Fourteenth Amendment.

Case Timeline

December 21, 2022