Costco's board of directors is calling on shareholders to vote against a proposal to eliminate the wholesale retailer's diversity, equity, and inclusion (DEI) program.
“At Costco Wholesale, our success is built on service to our valued stakeholders: our employees, members, and suppliers. Our commitment to diversity, equity, and inclusion is consistent with our Code of Ethics. For our employees, these initiatives are built around inclusivity, ensuring all employees feel valued and respected.'' This was stated in a message to investors reported on . hill.
“Our commitment to diversity, equity, and inclusion reminds and reinforces the importance of creating opportunities for all. We believe this ability will improve our ability to attract and retain committed employees, which is critical because our success now depends on our more than 300,000 employees around the world.”
The message was sent ahead of Costco's annual shareholder meeting scheduled for January 23, 2025.
Shareholders challenge the legality of Costco's DEI program following the Supreme Court's decision in SFFA v. Harvard University that race-based discrimination in college admissions violates the Equal Protection Clause of Title 14. They will vote on proposals submitted by research centers. Fixed.
The proposal notes that 13 state attorneys general have warned Fortune 100 companies that the ruling implicates corporate DEI programs and is prompting numerous lawsuits.
Companies that have since rescinded their DEI commitments or laid off DEI employees include Alphabet, Meta, Microsoft, Zoom and John Deere, according to the proposal, but Costco's board of directors notes that Microsoft later clarified that it had eliminated two overlapping DEI roles, but nevertheless, its focus on diversity and inclusion “remains steadfast.”
“Costco still has such programs, but they recently quietly rebranded their DEI program as 'People and Communities,' even though it was disturbing enough to realize this,” the National the Center for Public Policy Research wrote in its shareholder proposal. “However, adding new labels to discriminatory practices will not protect Costco and its shareholders from these risks.”
The foundation argues that Costco's renamed program still openly expresses a “commitment to equity,” which means equality of outcomes, not opportunity, and that the company still has a “chief diversity officer.” The company also accused the company of still having a supplier diversity program in place to select suppliers. It appears to still consider race and gender in hiring and promotions based on race and gender, and “donates shareholder funds to organizations that advance discriminatory policies in DEI.”
“Costco, with its 310,000 employees, has at least 200,000 employees who could be victims of this type of unlawful discrimination because they are white, Asian, male, or straight. “The proposal claims that “So even if only a small percentage of its employees sue, and only a small percentage of them win, the cost to Costco could be in the tens of billions of dollars.”
Despite the Supreme Court's ruling, Costco's board maintained that the company's DEI practices are “legally sound and there is nothing in the proposal to suggest otherwise.”
The board also argued that the National Center for Public Policy Research's request to investigate Costco's DEI practices “reflects policy bias” and could strain the company's resources.
Citing a 2023 federal district court ruling, the board argued that the National Center for Public Policy Research's “broader challenge is not to reduce our risk, but to eliminate our diversity efforts.” .
The board noted that the National Center for Public Policy Research had previously expressed a determination to “fight back” against the “awake politicized evils of capital and corporations,” and that the foundation has announced “shareholder activism.” claims to be continuing.
“We welcome members from all walks of life and backgrounds. Because our membership is diverse, we believe that serving a diverse group of employees increases satisfaction.” Costco Director The organization defended the company's DEI practices. “Having diversity in our supplier base, including due consideration for small and medium-sized businesses, is beneficial for the same reasons that diversity benefits us. We believe in fostering creativity and innovation in our services.”
Fox News Digital has reached out to Costco and the National Center for Public Policy Research for additional comment.
“DEI is the redistribution of opportunity to employees, potential employees, and suppliers based on race and gender,” Ethan Peck, deputy director of the Free Enterprise Project at the National Center for Public Policy Research, said in a statement. “This is not only unethical, it is illegal and risks future litigation. It also increases the value of merit and, by extension, excellence and innovation (company The company has a fiduciary duty to its shareholders to maximize its ability to the best of its ability), but this may come at a cost.
