Costco's Dei Programs Face New Scrutiny From 19 Republican Attorneys General

A group of 19 attorneys general said in a letter that Costco is "clinging" to "divisive and discriminatory DEI practices" after shareholders rejected a proposal to review the programs.

Dominick Reuter/Business Insider

• Costco's commitment to diversity and inclusion is facing fresh scrutiny from Republicans.
• In a letter to CEO Ron Vachris, 19 attorneys general urged the company to end its DEI programs.
• The letter comes after Costco shareholders overwhelmingly rejected a proposal to report on potential DEI risks.

Costco appears to have a target on its back.

The wholesale club's commitment to DEI is facing fresh scrutiny from a group of 19 Republican attorneys general who say the retailer is "clinging" to "divisive and discriminatory DEI practices."

Led by Iowa Attorney General Brenna Bird and Kansas AG Kris Kobach, the group sent a letter to Costco CEO Ron Vachris urging him to "end all unlawful discrimination imposed by the company through diversity, equity, and inclusion ('DEI') policies."

The letter also cites President Donald Trump's executive order from last week that encouraged private companies to end DEI-related initiatives while moving to end the programs at federal agencies.

"Costco should not have policies that discriminate in hiring based on race or gender," the letter to Vachris said.

The attorneys general did not identify in their letter any specific allegations of discrimination that had occurred at Costco as a result of its diversity-related policies. However, they said that several companies have faced lawsuits related to DEI policies and that ending them would reduce the company's legal exposure.

The letter comes after 98% of Costco shareholders rejected a proposal from a conservative think tank to report on any legal and financial risks arising from DEI policies.

"The overwhelming support of our shareholders' vote really puts an answer to that question," Vachris said following the news last week.

In their letter, the attorneys general said Costco had 30 days to respond either notifying them that Costco has ended its DEI policies or explaining why it had not.

Many companies, including Meta, McDonalds, and Walmart, have decided in recent months to roll back or end their DEI programs. Target announced on January 24 that it was ending multiple DEI programs in an effort to remain "in step with the evolving external landscape."

Others, like Costco, have publicly supported DEI. JPMorgan CEO Jamie Dimon recently defended the bank's diversity initiatives.

"We are going to continue to reach out to the Black community, the Hispanic community, the LGBT community, the veterans community," Dimon said.

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