Credited from: CBSNEWS
In a significant move, nineteen Republican attorneys general have called on Costco to dismantle its diversity, equity, and inclusion (DEI) policies, claiming that these initiatives are discriminatory and unlawful. This demand arises shortly after the company defended its DEI practices to shareholders. In a letter directed to Costco's CEO, Ron Vachris, the attorneys general emphasized the need for businesses to treat all individuals equally without divisive policies, highlighting President Donald Trump's recent executive order aimed at curbing DEI programs within the federal government and private sector.
The letter, spearheaded by Texas's Ken Paxton and Iowa's Brenna Bird, gives Costco 30 days to respond either by eliminating its DEI policies or providing an explanation for their continuation. They argue that Costco's adherence to DEI principles is at odds with recent judgments from the Supreme Court which deemed such practices as potentially illegal. "Costco should treat every person equally and based on their merit," the letter asserts, criticizing the retailer for "clinging" to these practices.
Despite the pressure, Costco's board remains steadfast. Just last week, over 98% of shareholders rejected a proposal from the conservative National Center for Public Policy Research that sought to evaluate the legal ramifications of its DEI policies. In their defense, Costco stated that fostering diversity enhances customer satisfaction and contributes positively to their business model. Their corporate stance is that diversity not only reflects their membership base but also promotes creativity within their offerings.
In recent months, various companies, including major retailers like Target, Walmart, and Meta, have begun scaling back their DEI programs amid rising pressures from political figures and a shift in public sentiment after the Supreme Court's decision to strike down affirmative action. In contrast, Costco's firm stance on DEI continues to set it apart, illustrating the growing divide in corporate America regarding race and equality in the workplace.
The attorneys general's letter argues that the continuation of such policies could expose Costco to potential legal challenges, as other firms have faced lawsuits linked to their DEI practices. While the letter does not cite specific instances of discrimination associated with Costco's policies, it emphasizes a trend where companies have started reevaluating their DEI commitments in light of recent political and judicial climates. With mounting pressure, analysts will be closely watching how Costco responds and whether it will alter its long-term corporate strategy concerning DEI.
For more details, read the full article on Newsweek, The Hill, and CBS News.