Target Corporation, CEO Brian Cornell and current and former board members have been sued for defrauding stockholders about the risks of its corporate diversity, equity and inclusion policies, according to Reuters.
MIAMI, FLORIDA - JUNE 01: (L-R) Marlene (did not want to provide last name) and Jill Dahne protest ... [+]
A class action lawsuit has been filed on behalf of the City of Riviera Beach Police Pension Fund, claiming Target defrauded investors by issuing “false and misleading” statements concerning actions supporting the company’s diversity, equity and inclusion mandates and, more broadly, its environmental, social and governance policies.
The suit alleges by failing to warn investors of ESG/DEI risks, its stock price was “artificially inflated” and board members secured re-election, “causing additional damages.”
The suit covers those who acquired Target common stock between August 26, 2022 and November 19, 2024.
Law firm Grant & Eisenhofer represents the class action members in the suit filed on Janaury 31 in the U.S. District Court for the Middle District of Florida, Fort Meyers Division.
This suit is marked as related to an earlier lawsuit brought by American First Legal on behalf of shareholder Brian Craig in the same court.
The lawsuit cites consumer backlash from Target’s May 2023 LGBT-Pride Campaign that caused some customers to boycott the company and shop at rivals, such as Walmart, whose results stood in “stark contrast” to Target’s. The boycott caused Target stock price to drop immediately and continue on a rocky course throughout 2024. The suit alleges Target defrauded investors by hiding the customer backlash and not advising them of the risks to earnings from DEI policies. In effect, the plaintiffs claim Target misused “investor funds to serve political and social goals.” As of posting, Target did not respond to request for comment.
In August 2023, America First Legal, founded by Stephen Miller and now a Trump administration policy advisor, brought a similar suit on behalf of shareholder Brian Craig in the same U.S. Middle District of Florida court. Also alleging losses due to the company’s Pride Month 2023 campaign, Target filed back seeking to dismiss the suit as merely a disagreement over business decisions and claimed it had effectively warned investors about potential customer backlash. It also requested a change of venue to Minnesota. This past December, the presiding judge ruled there was sufficient information to pursue claims against Target and refused to grant the venue change request.
Following Target’s January 24 announcement that it was evolving its Belonging initiative by “concluding its three-year diversity, equity and inclusion goals,” civil rights leaders called for a Target boycott beginning on February 1 in conjunction with Black History Month. In a rally outside the company’s Minneapolis headquarters, civil rights attorney and founder of the Racial Justice Network, Nekima Levy Armstrong said Target acted “cowardly” by “bowing to the Trump administration” and retreating from support of racial equity. Organizers called on supporters to patronize Costco instead since it has reaffirmed its support of DEI.
After the National Center for Public Policy Research submitted a proxy proposal to assess the company’s “litigation, reputational and financial risks” surrounding DEI, Costco shareholders voted almost unanimously in support of Costco’s current DEI initiatives at the company’s January shareholder meeting. Executive director of the NCPPR’s Free Enterprise Project, Stefan Padfield shared in a statement to me that his organization warned Target of its DEI risks in 2024 and followed by warning Costco of the risks in the proxy proposal. “Now Target is getting sued and Costco is getting letters from state attorney generals.” Padfield is referring to a January 30 letter to Costco CEO Ron Vacharis from 19 AGs requesting Costco notify them within 30 days whether the company has repealed its DEI policies or explain why it has failed to do so.
Grant & Eisenhofer Files Class Action Lawsuit Against Target Corporation On Behalf Of Pension Fund (Businesswire, 1/31/2025)
After Target backs Away From Diversity Programs, Civil Rights Activists Call For A Boycott (PBS, 1/31/2025)
Target Is Sued For Defrauding Shareholders About DEI (Reuters, 2/3/2025)