Costco’s board wants shareholders to vote no on the DEI program challenge

Costco Board of Directors It urges shareholders to vote against the proposal that would eliminate the wholesale retailer’s Diversity, Equity and Inclusion (DEI) program.

“Our success at Costco Wholesale has been built on serving our important stakeholders: employees, members, and suppliers. Our diversity, equity, and inclusion efforts follow our Code of Ethics: For our employees, these efforts are centered around inclusion — having it all. Our employees feel valued and respected,” the board wrote. Management in a letter to investors previously reported by The hill. “Our diversity, equity and inclusion efforts remind and reinforce to everyone at our company the importance of creating opportunities for all. We believe that these efforts enhance our ability to attract and retain employees who will help our business succeed. This ability is critical because we owe our success to our now-larger employees.” About 300,000 employees around the world.”

The letter was sent ahead of Costco’s annual shareholder meeting scheduled for January 23, 2025.

Shareholders will vote on a proposal from the National Center for Public Policy Research challenging the legality of Costco’s DEI program following a Supreme Court ruling in SFFA v. Harvard Discrimination on the basis of race in college admissions violates the equal protection clause of the Fourteenth Amendment.

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The motion cites how attorneys general in 13 states have warned Fortune 100 companies that the ruling implicates corporate DEI programs, and a number of lawsuits have been filed.

Companies that have since backed away from DEI commitments and/or laid off employees from DEI divisions include Alphabet, Meta, Microsoft, Zoom and John Deere, the motion says, though Costco’s board says Microsoft later clarified that it eliminated two redundant DEI roles, So far its focus on diversity and inclusion “remains consistent.”

“However, Costco still has such a program, although it was apprehensive enough to admit it because it recently and quietly renamed its DEI program to ‘People and Communities,’” the National Center for Public Policy Research wrote in its shareholder proposal. “But placing a new label on discriminatory practices does not protect Costco and its shareholders from these risks.”

The foundation denounced that Costco’s rebranded program still publicly expresses “commitment to equality,“Which he argues means equality of outcomes, not opportunity — and that the company still employs a “chief diversity officer,” still has a supplier diversity program that selects suppliers based on race and gender, and still appears to take race and gender into account in hiring and promotion. “And he continues to contribute shareholder funds to organizations that work to advance DEI’s discriminatory agenda.”

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“With 310,000 employees, Costco likely has at least 200,000 employees who are likely to be victims of this type of unlawful discrimination because they are white, Asian, male, or straight,” the proposal says. “Consequently, even if only a small portion of these employees file a lawsuit, and only some of those are found successful, the cost to Costco could be in the tens of billions of dollars.”

Despite the Supreme Court ruling, Costco’s board maintained that its DEI practices are “legally appropriate, and nothing in the proposal says otherwise.” The board also claimed that the National Center for Public Policy Research’s request to conduct a study of Costco’s DEI practices “reflects policy bias” and threatens to burden the company’s resources.

Citing a 2023 federal district court decision, the board argued that “the broader agenda of the National Center for Public Policy Research does not reduce risks to the company but eliminates diversity initiatives.” The board claims the foundation is continuing “shareholder activism,” noting how the National Center for Public Policy Research has previously expressed its commitment to “fighting” against “the evils of the world.” It awakened politicized capital And companies.”

“We welcome members from all walks of life and backgrounds. With the diversity of our membership, we believe serving it with a diverse group of employees enhances satisfaction,” Costco’s board of directors wrote, defending its DEI practices. “Having diversity in our supplier base, including appropriate attention to small businesses, is beneficial for many of the same reasons that diversity benefits our company. We believe it fosters creativity and innovation in the goods and services we provide to our members.”

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Fox News Digital has reached out to Costco and the National Center for Public Policy Research for additional comment.