Costco's board urges shareholders to vote down DEI's plan challenge

Costco Board of Directors Asks shareholders to vote no on a proposal that would eliminate the Wholesale Retail Diversity, Equity and Inclusion (DEI) program.

“Our success at Costco Wholesale is based on service to our most important stakeholders: our employees, members and suppliers. Our diversity, equity and inclusion efforts follow our Code of Ethics: For our employees, these efforts revolve around inclusion – Having all the board of directors wrote in a message to investors: Our employees feel valued and respected. the hill “Our diversity, equity and inclusion efforts remind and reinforce the importance of creating opportunities for all. We believe these efforts enhance our capacity to attract and retain employees who contribute to the success of our business.” This capacity is very important because we owe our success to our more than 300,000 employees worldwide.”

The message was sent ahead of Costco's annual meeting of shareholders scheduled for January 23, 2025.

Shareholders will vote on a proposal filed by the National Center for Public Policy Research challenging the legality of Costco's DEI program following the Supreme Court's ruling. SFFA vs. Harvard that discrimination based on race in college admissions violates the Equal Protection Clause of the Fourteenth Amendment.

Was 2024 the year DEI broke up?

The proposal notes how attorneys general in 13 states have warned Fortune 100 companies that the ruling would include the companies' DEI programs, and that a number of lawsuits have been filed.

Companies that have since canceled DEI commitments and/or laid off employees in DEI divisions include Alphabet, Meta, Microsoft, Zoom and John Deere, the filing says, although Costco's board says Microsoft later clarified that two additional roles Deleted DEI. Its focus on diversity and inclusion “remains unwavering.”

“Yet Costco still has such a program, although it was alarmed enough to recognize this because it recently renamed its DEI program to 'People and Communities,'” the National Center for Public Policy Research wrote in its shareholder proposal. ” But slapping a new label on discriminatory practices does not protect Costco and its shareholders from these risks.

The foundation criticized that Costco's rebranded program is still clearly a “commitment to justiceThat, he argues, means equality of outcome, not opportunity — and that the company still employs a “chief diversity officer,” still has a supplier diversity program that selects suppliers based on their race and gender, it seems. It plays a role in race and gender. hiring and promotion “and still funnels shareholder money to organizations that advance DEI's discriminatory agenda.”

WALMART CEO says DEI plans return: 'We continue to make the best decisions we can'

“With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of unlawful discrimination because they are white, Asian, male or straight,” the motion states. Accordingly, even if only a fraction of these employees sue, and only some of them are successful, the cost to Costco could be tens of billions of dollars.

Despite the Supreme Court's ruling, Costco's board stated that its DEI actions were “legally appropriate and nothing in the proposal suggests otherwise.” The board also claimed that the National Center for Public Policy Research's request to study Costco's DEI practices “reflects a policy bias” and threatens to strain the company's resources.

Citing a 2023 federal district court decision, the board argued that the National Center for Public Policy Research's “broader agenda is not to reduce corporate risk, but to abolish diversity initiatives.” The board claims the foundation will continue to be “stakeholder activism,” noting how the National Center for Public Policy Research has already declared its commitment to “fighting evil.” It woke up politicized capital and companies.”

Defending its DEI practices, Costco's board of directors wrote: “We welcome members from all walks of life and backgrounds. As our membership becomes more diverse, we believe that serving it with a diverse group of employees increases satisfaction.” ” “Having diversity in our supplier base, including appropriate attention to small businesses, is beneficial for the same reasons that diversity benefits our company. We believe it fosters creativity and innovation in the products and services we provide to our members.” We provide, it strengthens.”

Get FOX Business on the Move by clicking here

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