The state of Florida filed a lawsuit against Target on Thursday, alleging the company defrauded investors by failing to disclose the financial risks of its LGBTQ Pride merchandise line, which sparked conservative boycotts two years ago, the latest instance of a Republican-led state taking legal action over a company’s diversity, equity and inclusion efforts.
Target previously faced conservative boycotts over its 2023 Pride Month line. (Photo by Scott ... [+]
The State Board of Administration of Florida, the agency that manages the state’s public pension funds and is chaired by Republican Gov. Ron DeSantis, filed the suit in Florida federal court Thursday alongside the conservative America First Legal Foundation.
The suit accuses Target of misleading investors about the risks of its 2023 Pride merchandise line, which it framed as a contributing factor to the brand’s sales falling for the first time in seven years.
Target executives acknowledged on an earnings call in August 2023 the “strong reaction” to its Pride line was a “signal for us to pause, adapt and learn,” though analysts told the Washington Post inflation was also to blame for the retailer’s sales falling.
The suit blasted Target’s Pride line as “exceptionally offensive” and “extreme,” citing items including a tuck-friendly swimsuit for transgender women—which attracted controversy in 2023 as some critics falsely claimed the swimsuit was sold in children’s sizes—and apparel made by the British brand Abprallen, which has used Satanic imagery in designs, but not in its merchandise sold at Target.
The lawsuit makes similar claims to another suit filed earlier this month by Florida’s City of Riviera Beach Police Pension Fund, which similarly accused Target in federal court of defrauding investors about its Pride merchandise.
The lawsuits come weeks after Target—previously known for its support for Pride and efforts to sell merchandise from diverse suppliers—walked back its DEI goals, which included efforts to hire and promote people of color and women.
The state of Missouri sued Starbucks last week, with the state’s Republican Attorney General Andrew Bailey alleging the company’s DEI policies—which included a push to hire and promote people of color and women—violated anti-discrimination laws. Starbucks, in response, reportedly denied Bailey’s allegations and said its hiring practices were “designed to ensure the strongest candidate for every job every time.” A coalition of 19 Republican-led states also sent a letter to Costco, which has refused to back down from its DEI policies, on Jan. 27 demanding the company either roll back its programs or explain why it has not done so within 30 days. The letter cited both Trump’s executive order directing companies to back down from DEI, as well as the Students for Fair Admissions v. Harvard Supreme Court decision that ended affirmative action at universities. Costco’s shareholders rejected a proposal, nearly unanimously, in January that would have required the retailer to evaluate the risks of its DEI policies.
Many companies have scaled back their diversity programs in light of Trump’s election victory and his executive orders attacking DEI in the federal government and at private companies. Before Trump’s inauguration, Walmart, McDonald’s, Meta and Amazon all said they would take various steps to roll back their DEI programs. Meta said its policy changes—which included ending DEI trainings and programs intended to hire more diverse employees—were made in response to the changing “legal and policy landscape” surrounding DEI. Other companies have walked back their DEI commitments since Trump took office, including Goldman Sachs, which dropped a requirement that companies it takes public must have at least two diverse members of their boards, and Deloitte, which told employees to remove pronouns from their email signatures.
Pepsi Rolling Back Diversity Initiatives—Here Are All The Companies Cutting DEI Programs (Forbes)