The debate over corporate diversity, equity and inclusion (DEI) policies has reached a boiling point. The state of Florida has filed a securities fraud lawsuit against Target, while Missouri is suing Starbucks for violating federal and state civil rights laws. These lawsuits come after President Trump signed an executive order targeting DEI programs in the private sector.
The Justice Department is preparing a report to identify steps, including possible criminal investigations, to deter the use of DEI programs or principles that constitute illegal discrimination or preferences in the private sector. The report is expected to be presented on March 1.
AFL, a partner in the Target lawsuit, has identified 45 companies that may violate federal anti-discrimination laws, including Amazon and Walmart. These retailers have scaled back their DEI programs amid growing concerns over their legality.
The State of Florida claims Target misled investors about the risks of its 2023 Pride Month merchandise line, which caused a consumer backlash and resulted in the loss of “tens of billions of dollars” for shareholders. Starbucks is accused of enforcing “race-and-sex based hiring practices” and providing exclusive training and employment benefits to select groups.
National retailers face growing risks from DEI policies, which have become a political and social minefield. While some companies remain committed to their DEI initiatives, others are reevaluating their policies amid the heightened rhetoric against DEI after President Trump’s executive order.
The controversy surrounding DEI policies highlights the need for clarity on what constitutes illegal discrimination in the workplace. As one attorney warned, “Companies may have internal communications suggesting or even confirming that some hiring or promotion decisions were made on the basis of race or gender, which would violate federal anti-discrimination laws.”
Source: https://www.forbes.com/sites/pamdanziger/2025/02/22/retailers-risk-from-dei-policies-grows-after-target-and-starbucks-are-hit-with-lawsuits