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Nineteen Republican attorneys general sent a letter to Costco on Monday blasting the wholesale retailer for standing by its commitment to diversity, equity, and inclusion (DEI) programs.
Costco’s (COST0.00%) Board of Trustees decided to continue its DEI initiatives late last year despite many of the biggest companies in the U.S. scaling theirs back or scrapping them altogether. The company said DEI efforts are good for business and reflect its core values of inclusion and respect. That decision was upheld by shareholders last week, who voted in an overwhelming margin to back the policies.
But Iowa Attorney General Brenna Bird claimed in a letter co-signed by 18 other GOP state AGs that the practice is “discriminatory” and “illegal,” claiming it violates the Students for Fair Admissions v. Harvard, in which the U.S. Supreme Court ruled that race-based affirmative action programs in college admissions violate the 14th Amendment. Bird also said the program defies President Donald Trump’s recent executive order that encouraged private companies to end DEI.
“While other companies right the ship and abandon their illegal, woke policies, Costco has doubled down,” Bird said. “I’m putting Costco on notice to do the right thing and eliminate discriminatory DEI. No American should be denied an opportunity because they don’t fit the woke mold.”
Costco insists that its DEI program are fully legal. Its CEO Ron Vachris even took the step of responding directly to customers, emphasizing that the company doesn’t rely on quotas but instead focuses on offering equal opportunities and fair pay to all employees.
The company says DEI policies help attract and retain talented employees, foster innovation, and strengthen relationships with customers and suppliers.
“We welcome members from all walks of life,” Costco’s Board of Directors said previously. “As our membership diversifies, we believe that having a diverse team improves satisfaction. A diverse workforce brings creativity to our products, better understands customer preferences, and reflects the diverse backgrounds of the members we serve.”
Costco’s defense of DEI stands out as many major companies — like Walmart, Google, Meta, Microsoft, and McDonald’s — have scaled back or reassessed their DEI goals as Trump mounts an intense campaign against the programs.
Last week, Trump ordered that all DEI efforts across the federal government be shut down by 5:00 p.m. on Wednesday, with most of those staff expected to be laid off by Jan. 31. Trump also revoked a 60-year-old executive order that banned discrimination in hiring practices in the federal government, and directed the Federal Aviation Administration to halt DEI-related hiring practices.
Costco did not immediately return a request for comment on Tuesday.
— Francisco Velasquez and William Gavin contributed to this article.