Attorneys general from 19 states have urged Costco to discontinue its diversity, equity, and inclusion (DEI) initiatives, citing concerns over potential unlawful discrimination. This action aligns with President Donald Trump’s recent executive order eliminating DEI programs within federal agencies and advising private companies to follow suit.
In a letter addressed to Costco CEO Ron Vachris, the attorneys general emphasized that race-based employment practices violate both state and federal laws. Kansas Attorney General Kris Kobach stated, “Racial discrimination is both immoral and illegal. Race-based employment hiring violates state and federal law, and as the chief law enforcement officer of Kansas, I intend to enforce the law vigorously.”
The letter requests that Costco either confirm the repeal of its DEI policies or provide an explanation for their continuation within 30 days. Iowa Attorney General Brenna Bird commented, “It’s time to ditch DEI. While other companies right the ship and abandon their illegal, woke policies, Costco has doubled down.”
Despite these warnings, Costco’s board of directors recently recommended that shareholders vote against a proposal to eliminate the company’s DEI program. The board asserted that DEI efforts are integral to fostering an inclusive workplace and enhancing business success. They stated, “Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members, and suppliers. Our efforts around diversity, equity, and inclusion follow our code of ethics.”
This stance contrasts with actions taken by other major corporations. Companies such as Walmart, McDonald’s, and John Deere have recently scaled back their DEI initiatives, influenced by a 2023 Supreme Court decision banning affirmative action in college admissions and recent actions by the Trump administration targeting DEI programs.
The ongoing debate highlights the tension between promoting workplace diversity and adhering to legal frameworks that prohibit discrimination. As the situation develops, companies like Costco may face increased scrutiny over their DEI policies and their alignment with both ethical standards and legal requirements.