Target is facing a lawsuit from Florida and America First Legal, alleging that it concealed the financial risks of its diversity, equity, and inclusion (DEI) programs and its 2023 Pride Month merchandise collection. The lawsuit was filed by Florida Attorney General James Uthmeier and America First Legal on behalf of a Florida board overseeing state pensions.
The latest conservative attack on companies’ efforts to promote diversity comes after Target scrapped some of its DEI policies following pressure from Republicans and President Donald Trump’s attempts to roll back DEI in the private sector. However, the company’s retreat from DEI has provoked backlash from civil rights groups and some of its founders’ heirs.
Several companies, including Coca Cola, have echoed the contention that DEI is good business. The lawsuit shows that Target is getting squeezed from both sides on DEI, with conservative media figures criticizing the company’s efforts to promote diversity and inclusion.
In 2023, Target faced a backlash over its Pride Month merchandise, which some claimed were being sold to children. However, this claim was debunked by the Associated Press. Despite removing certain items, Target’s response frustrated supporters of gay and transgender rights, who said the company caved to bigoted pressure.
The lawsuit is America First Legal’s second against Target alleging fraud for the backlash to Pride Month in 2023. The first case remains ongoing. Attorneys argue that using securities lawsuits to attack corporate DEI programs is becoming a trend, and this case may pave the way for others to follow.
Target recently made significant changes to its diversity initiatives, including eliminating hiring goals for minority employees and making other adjustments to its strategy. However, the company has faced fierce backlash from DEI supporters, who argue that it should stand up for diversity as a goal rooted in sound business practices.
The lawsuit may impact Target’s business, with customer visits slowing down over the past few weeks. According to Placer.ai, foot traffic to Target dropped 3.9% and 1.4% to Walmart during the week of February 10, while Costco saw an increase of 4.6%.
Source: https://edition.cnn.com/2025/02/21/business/target-dei-lawsuit/index.html