Starbucks Prevails in Legal Challenge to Its Diversity Policies
Federal court dismisses lawsuit seeking to unwind chain’s efforts to increase the proportion of minority groups in its workforce Starbucks Corp., based is in Seattle, was accused of violating its duty to shareholders by supporting corporate policies to increase representation of women and minority groups. Photo: David Ryder/Bloomberg News By Theo Francis Updated Aug. 11, 2023 7:22 pm ET A federal court dismissed a lawsuit accusing Starbucks executives and directors of violating their fiduciary duty to shareholders by supporting corporate diversity policies. The Friday morning decision in Spokane, Wash., is a setback for one of a handful of lawsuits that legal activists have filed in an effort to unwind companies’ policies aimed at increasing the proportion of women and
Starbucks Corp., based is in Seattle, was accused of violating its duty to shareholders by supporting corporate policies to increase representation of women and minority groups.
Photo: David Ryder/Bloomberg News
A federal court dismissed a lawsuit accusing Starbucks executives and directors of violating their fiduciary duty to shareholders by supporting corporate diversity policies.
The Friday morning decision in Spokane, Wash., is a setback for one of a handful of lawsuits that legal activists have filed in an effort to unwind companies’ policies aimed at increasing the proportion of women and members of racial or ethnic minority groups in their workforces and contracting corps.
“We’re pleased with this decision given we very much disputed the plaintiff’s claims,” a Starbucks spokeswoman said.
National Center for Public Policy Research, which filed the lawsuit as the owner of a few dozen Starbucks shares, must decide whether to appeal the order or abandon its case.
Scott Shepard, executive director of the group’s Free Enterprise Project, said the group would wait for the judge’s written order before deciding. “We will continue to pursue relief from illegal discrimination on behalf of shareholders and employees,” he said.
Also this week, activist group America First Legal Foundation sued the chief executive and directors of retail giant Target on behalf of an investor holding about 216 shares in the company.
The complaint, filed in federal court in Ft. Myers, Fla., alleges that Target Chief Executive Brian Cornell and the company’s board misled shareholders about the degree to which they monitored social and political issues, while the company pursued a line of LGBTQ-pride merchandise, including rainbow-eared Mickey Mouse apparel, that the lawsuit says prompted a customer backlash.
The lawsuit attributes $10 billion of market-capitalization decline between May 18 and May 28 to the backlash and says the plaintiff lost nearly $6,000 through mid-June. Target shares fell about 11% during that period, while the S&P 500 rose about 2.3%. Target shares traded Friday about 17% below mid-May levels.
Target didn’t immediately respond to a request for comment.
America First also filed a lawsuit against Amazon.com on behalf of a Texas woman alleging that the company discriminates against white entrepreneurs seeking delivery contracts by not making a startup grant available to them. In court, Amazon has defended its policies, calling them appropriate and the lawsuit without merit.
Write to Theo Francis at [email protected]
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