Nineteen state attorneys general have issued a stern warning to Costco, demanding the wholesale giant dismantle its Diversity, Equity, and Inclusion (DEI) policies. They argue these policies constitute unlawful discrimination, echoing the stance of former President Donald Trump, whose executive order sought to eliminate DEI initiatives from federal agencies and encouraged the private sector to follow suit. The attorneys general contend that race-based hiring practices violate state and federal law, pledging to enforce these laws rigorously. This action signals a broader push by conservative legal officials to challenge DEI programs, framing them as discriminatory and contrary to the principles of equal opportunity.
The attorneys general’s letter to Costco CEO Ron Vachris draws heavily on the rationale behind Trump’s executive order. The order, signed early in his presidency, directed government agencies to identify and eliminate discriminatory DEI practices. It further encouraged private sector entities to align with federal civil rights laws, setting the stage for potential legal action against perceived violators. The attorneys general’s letter specifically targets publicly traded companies, large nonprofits, foundations with substantial assets, professional associations, and well-endowed higher education institutions as potential subjects of DEI investigations.
The letter comes on the heels of a shareholder proposal at Costco that sought to assess the risks associated with the company’s DEI policies. This proposal, put forward by the National Center for Public Policy Research, a conservative activist group, was ultimately rejected by Costco shareholders. The Costco board defended its DEI commitment, asserting that such policies are both appropriate and necessary for fostering a respectful and inclusive environment. However, the rejection of the shareholder proposal did not deter the attorneys general, who view Costco’s continued commitment to DEI as defiance against the growing conservative backlash against such initiatives.
The attorneys general argue that DEI policies, while ostensibly aimed at promoting inclusivity, actually perpetuate discrimination by favoring certain groups based on race. They advocate for race-neutral practices, which they believe better uphold the founding ideals of the country. Their letter contrasts these race-neutral practices with what they describe as “invidious race-based discrimination” fostered by “woke corporations.” This language reflects a broader conservative critique of DEI, portraying it as a radical ideology that undermines meritocracy and promotes reverse discrimination.
The clash between Costco and the attorneys general highlights the growing national debate surrounding DEI. While proponents argue that DEI initiatives are crucial for addressing historical inequities and fostering diverse workplaces, critics contend they lead to discrimination against individuals from majority groups. The attorneys general’s action represents a significant escalation in this debate, signaling a willingness to use legal means to challenge DEI policies in the private sector. The outcome of this confrontation could have far-reaching implications for how companies approach diversity and inclusion in the workplace.
The attorneys general have given Costco 30 days to respond, demanding either a repeal of its DEI policies or a justification for their continuation. This ultimatum sets the stage for a potential legal battle, with the attorneys general seemingly prepared to pursue legal action if Costco does not comply. The case underscores the increasingly politicized nature of DEI, with conservatives actively seeking to dismantle such programs and progressives defending them as essential for social progress. The future of DEI in corporate America hangs in the balance, with the Costco case serving as a key battleground in this ongoing struggle.
