The State of Florida has filed a lawsuit against Target, accusing the retailer of defrauding its shareholders by concealing the risks associated with its diversity, equity, and inclusion (DEI) initiatives, which allegedly caused a significant customer backlash. The lawsuit, filed in a federal court in Fort Myers, claims that Target misled investors by downplaying the negative financial impact of its DEI mandate and environmental, social, and governance (ESG) efforts.
This marks the first shareholder lawsuit led by a U.S. state regarding Target’s management of DEI matters. Florida’s lawsuit alleges that Target’s CEO, Brian Cornell, failed to properly address the severity of the customer boycotts that followed the retailer’s controversial May 2023 Pride Month campaign, which led to a steep decline in the company’s market value.
Florida’s Republican Attorney General James Uthmeier stated that corporations pushing “radical leftist ideology” at the expense of financial returns are threatening the retirement security of public sector workers. Target, based in Minneapolis, responded by asserting that it had warned investors about potential consumer boycotts due to its social and environmental initiatives.
The backlash from the Pride Month campaign forced Target to remove some LGBTQ-themed merchandise after store confrontations prompted safety concerns for employees. Following these moves, Target’s share price plummeted, dropping more than 50% from its peak in November 2021. In contrast, rival Walmart’s stock has surged.
On January 24, Target announced it would scale back its DEI initiatives by the end of this year, joining other companies such as Walmart and Amazon that have reduced similar efforts. Florida’s lawsuit follows proposed class actions filed earlier in 2023 and 2024.
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