Republican attorneys general from 19 states are pressuring Costco’s top boss to revoke the company’s diversity, equity and inclusion initiatives following President Trump’s anti-DEI executive order.
Just last week, 98% of Costco shareholders struck down a proposal requesting a report on the financial risks tied to diversity policies after the board unanimously recommended stakeholders vote against it.
Costco did not immediately respond to a request for comment.
In a letter sent to Costco CEO Ron Vachris on Monday, 19 state attorneys general, co-led by Texas Attorney General Ken Paxton and Iowa Attorney General Brenna Bird, accused Costco of enforcing DEI hiring policies that spurred “unlawful discrimination.”
The attorneys general ordered Costco to notify them within 30 days on whether it would be pulling its DEI policies, or explain why it would not do so.
“Although Costco’s motto is ‘do the right thing,’ it appears that the company is doing the wrong thing – clinging to DEI policies that courts and businesses have rejected as illegal,” the letter said.
Anti-DEI efforts have ramped up since Trump won the White House in November and have accelerated since he took office last week and argued in favor of “merit-based” policies.
On his first day in office, Trump signed an executive order that aims to end all DEI mandates and policies across the federal government.
The following day, he ordered that all federal employees working on these policies be placed on paid leave while his administration works to shut down their offices.
Major companies — including Walmart, Meta, John Deere and Tractor Supply — have backtracked on their DEI policies after facing harsh backlash from conservative activists, many of whom cite the 2023 Supreme Court decision that ruled against race-based affirmative action in college admissions.
Most recently, Target announced it was killing its diversity policies in a major reversal for a retailer long known for its outspoken support of LGBTQ and minority rights.
But Costco has only doubled down on its DEI agenda since encouraging shareholders to vote against the risk assessment proposal submitted by the National Center for Public Policy Research, a conservative think tank based in Washington.
In a proxy statement to investors, the board said it believes “our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary. The report requested by this proposal would not provide meaningful additional information.”
The wholesale retailer took it one step further, slamming the think tank and arguing it just used financial risks as a cover-up for wanting to end diversity initiatives.
“The proponent professes concern about legal and financial risks to the company and its shareholders associated with the diversity initiatives,” Costco said. “The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the company but abolition of diversity initiatives.”
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