RICHMOND, Va. — Virginia Attorney General Jason Miyares, alongside 18 other state attorneys general, has formally urged Costco’s CEO to reconsider and terminate what they describe as “unlawful” diversity, equity, and inclusion (DEI) policies. The joint letter, which is raising eyebrows across the business world, emphasizes the growing scrutiny agencies are placing on corporate approaches to DEI initiatives.
The letter addressed to Ron Vachris, Costco’s president and CEO, boldly states, “Although Costco’s motto is ‘do the right thing,’ it appears the company is doing the wrong thing—clinging to DEI policies courts and businesses have rejected as illegal.” The attorneys general contend Costco’s practices not only violate legal standards but also pose what they refer to as unfair discrimination against employees based on race, gender, and background.
At the heart of this letter lies reference to former President Donald Trump’s executive order titled “Ending Illegal Discrimination and Restoring Merit-based Opportunity.” This order urges businesses to dismantle “illegal DEI discrimination and preferences,” echoing the sentiments of state leaders seeking to redefine corporate accountability. Miyares and his colleagues firmly believe Costco has “doubled down” on these problematic policies, prompting their call for immediate action.
Interestingly, the letter also highlights how many major companies have, at least somewhat, rolled back their DEI policies. High-profile organizations like Amazon, Ford, McDonald’s, Meta, and Walmart have reportedly begun to evaluate or modify their approaches to diversity, hinting at potential ramifications for companies like Costco who remain steadfast. The attorneys general’s approach suggests they are not only targeting Costco but are also signaling to the business sector to take careful note of shifting expectations surrounding DEI practices.
Costco has not taken this criticism lightly. Responding to the controversy, the board of directors voted unanimously to ask shareholders to reject any proposal requiring them to assess business risks posed by current DEI practices. The board, standing by its commitment to “an enterprise rooted in respect and inclusion,” explained its position by stating, “The report requested by this proposal would not provide meaningful additional information.” This response reassures shareholders and stakeholders alike of the company’s dedication to maintaining its DEI objectives.
What this means for Costco remains to be seen. On one hand, there are staunch advocates of diversity initiatives who argue Costco’s policies are necessary for fairness and representation; on the other, critics argue they could serve as contentious barriers leading to legal repercussions. Should Costco heed the call from Miyares and others, it could potentially pave the way for sweeping changes not only within the company itself, but across the wider retail sector.
The actions from Virginia’s Attorney General are part of broader efforts by state leaders to contest the perceived excesses of corporate diversity initiatives. By pressuring businesses to abandon certain DEI practices, they are tapping directly to President Trump’s message, urging the private sector to realign itself with traditional merit-based systems. The multi-state coalition behind the letter signals increasing political mobilization around DEI issues with possible long-term consequences for corporate governance.
Looking forward, stakeholders are left to wonder about the future of Costco's DEI policies and the company’s overall image as it navigates these external pressures. The pushback against Costco’s DEI framework may resonate far beyond the immediate retail environment, setting precedents for how corporations approach inclusion and equality.
The dynamics at play suggest this issue will continue to resonate, triggering debates over corporate responsibility, legal ramifications, and overall employee satisfaction. Costco’s response and potential pivot will undoubtedly prove telling over the next few months as the national conversation surrounding diversity continues to evolve.