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Nineteen Republican attorneys general are urging Costco Wholesale to abandon its diversity, equity, and inclusion (DEI) policies, claiming the initiatives could lead to discrimination and legal risks. The move comes just days after 98% of Costco’s shareholders rejected a proposal requesting a report on the potential risks associated with its DEI programs, signaling staunch support for the retailer’s current policies amid growing scrutiny.
In a letter addressed to Costco CEO Ron Vachris and reported on by Reuters, state officials accused the company of doubling down on policies that they argued undermine merit-based principles and violate federal law. The coalition, co-led by Texas Attorney General Ken Paxton and Iowa Attorney General Brenna Bird, has demanded that Costco either repeal its DEI policies or provide a detailed explanation for maintaining them within 30 days.
Costco has not addressed the letter publicly or indicated whether it will adjust its policies in response to the attorney general’s demands.
The pushback from Republican attorneys general reflects a broader national debate over corporate DEI initiatives, which have become a focal point of political and legal challenges in recent years. Critics argue that such policies could lead to reverse discrimination, while supporters maintain they are essential for fostering inclusive workplaces and addressing systemic inequities.
Despite the pressure, Costco’s shareholders have shown overwhelming support for the company’s current approach. Last week’s shareholder vote, in which 98% rejected the proposal to assess DEI-related risks, underscores the retailer’s commitment to diversity initiatives.
The Republican attorneys general, however, remain steadfast in their opposition. “Costco’s policies prioritize identity over merit, which we believe is not only unfair but also unlawful,” said Texas Attorney General Ken Paxton. “We urge the company to reconsider its stance and align its practices with principles of equal opportunity for all.”
