Costco Faces Pressure From GOP Attorneys General Over Diversity Policies

Costco Wholesale store front with entrance and exit.

Republican attorneys general press Costco to reconsider its DEI policies under threat of legal scrutiny.

Quick Takes

  • Nineteen Republican attorneys general demand Costco revoke DEI policies.
  • Costco has 30 days to respond to the request.
  • 98% of Costco shareholders voted against a proposal that questioned DEI policies.
  • Companies like McDonald’s and Toyota also reassessing DEI policies.

Republican Attorneys General Call for Action

A coalition of 19 Republican attorneys general have formally urged Costco to reconsider its diversity, equity, and inclusion (DEI) policies. They argue these initiatives could conflict with anti-discrimination laws. These legal officials have sent a letter to CEO Ron Vachris, setting a 30-day period for Costco to either repeal the policies or provide a satisfactory explanation for their continuation.

The letter alleges Costco’s DEI strategies may represent unlawful discrimination, emphasizing merit-based hiring over race or gender preferences. Ken Paxton of Texas and Brenna Bird of Iowa, co-leading the effort, cite legal precedents as grounds for their appeal, reflecting a broader concern with how DEI initiatives are implemented in businesses.

Shareholder Backlash Against DEI

Costco shareholders overwhelmingly voted against a proposal for a report on financial risks associated with DEI policies. This decision by 98% of shareholders highlights the divide between company governance and investor sentiment. Those against DEI initiatives argue that such policies impose undue burdens and potential legal risks, contrasting with the company’s motto to “do the right thing.”

Recent years have seen other major corporations, such as McDonald’s and Toyota, reassess their DEI commitments. Critics assert that DEI efforts inherently risk creating divisions within workplaces. Yet, some companies, like JPMorgan, continue to express their support for such initiatives, believing in their foundational role in creating inclusive work environments.

Pressure from Political and Public Figures

The letter to Costco also references a past executive order by President Donald Trump, urging private sector abandonment of DEI strategies. Trump’s position reflects a conservative viewpoint that such policies might infringe on fundamental fairness in employment. Moreover, there have been public calls for boycotts against businesses maintaining DEI practices, stirring further tension in the corporate landscape.

The Republican-led initiative underscores a political divide over how businesses should operate amidst evolving social norms. Companies are left at a crossroads, between satisfying their commitment to social responsibility and navigating potential legal pitfalls.

Sources:

  1. https://nypost.com/2025/01/28/business/republican-ags-from-19-states-push-costco-to-revoke-dei-policies/
  2. https://www.yahoo.com/news/costcos-dei-programs-face-scrutiny-203753261.html
  3. https://www.usatoday.com/story/money/2025/01/28/costco-dei-policies-republican-attorneys-general/77986371007/
  4. https://www.theepochtimes.com/business/republican-led-states-demand-costco-ditch-dei-5800108