Kansas Attorney General Kris Kobach and Iowa Attorney General Brenna Bird are leading a coalition of 19 state attorneys general in demanding that Costco cease its diversity, equity, and inclusion (DEI) hiring policies, calling them unlawful and discriminatory.
In a letter sent to the retail giant, the attorneys general argue that race-based hiring practices violate state and federal law and warn Costco that its continued implementation of DEI policies could expose it to legal action.
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Kobach, who has been at the forefront of legal challenges to corporate DEI policies, made it clear that his office intends to take action if necessary.
“Racial discrimination is both immoral and illegal,” Kobach said. “Race-based employment hiring violates state and federal law, and as the chief enforcement officer of Kansas, I intend to enforce the law vigorously.”
The letter cites recent lawsuits against companies with DEI hiring practices and points to the 2023 U.S. Supreme Court decision striking down affirmative action in universities as further evidence that race-based preferences are legally questionable.
In addition to warning Costco about potential legal liability, the letter also suggests that the company should be addressing more pressing ethical concerns, specifically allegations of child slave labor linked to its supply chain in China.
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“The Supreme Court has repeatedly warned against using race-based preferences and classifications,” the letter states. “Race-neutral practices, on the other hand, honor the founding ideals of this country.”
The letter gives Costco 30 days to:
- Notify the attorneys general that it has repealed its DEI policies
- Provide a legal explanation for why it refuses to do so
The coalition’s action follows previous legal warnings issued to corporate America in the wake of the Supreme Court’s 2023 decision on affirmative action. A group of 13 attorneys general had previously sent letters to major companies warning that race-based hiring practices could lead to serious legal consequences.
Many corporations, including Amazon, Ford, John Deere, McDonald’s, Meta, and Walmart, scaled back or ended their DEI initiatives. However, according to the letter, Costco has refused to change its policies.
“Costco’s position runs contrary to the Supreme Court’s recent decisions and raises concerns about Costco’s compliance with state and federal laws,” the attorneys general wrote.
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The legal challenge against Costco is part of a wider national pushback against DEI initiatives by Republican attorneys general and lawmakers. Critics argue that DEI programs promote racial discrimination, while supporters maintain that they help create inclusive workplaces and economic opportunities for underrepresented groups.
The 19 attorneys general who signed onto the letter include officials from Alabama, Arkansas, Georgia, Idaho, Kentucky, Louisiana, Missouri, Montana, Nebraska, and North Dakota.
With a legal deadline now looming, all eyes are on Costco to see whether it will adjust its hiring policies or face potential legal battles.
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