Costco Is Walking the Walk But Might Need to Talk the Talk Too

The retailer must clearly articulate its DEI policy to dispel doubts

- BETH KOWITT

Republican attorneys general have put Costco, the US-based mega-retailer, on notice. Nineteen of them recently signed off on a letter telling the company to stop "clinging to [Diversity, Equity, Inclusion] policies that courts and businesses have rejected as illegal" and that it should do the right thing by "following the law and repealing its DEI policies."

The attorneys general never say what exactly those policies are, and it doesn't really seem to matter a whole lot to them. Their complaint puts all of Costco's diversity efforts in the same bucket—bad and illegal—portraying DEI as if it were a single entity rather than a grouping of policies with lots of different approaches and goals.

The attorneys general are adopting a strategy used by private conservative advocacy groups, most notably Stephen Miller's America First Legal, that have been on a crusade against what they consider "woke corporations." They have tried to demonize DEI by painting it in binary terms—something that is unfair and bad, that companies are either for or against.

"They've done a really effective job at owning the public dialogue about this without any nuance," says Jason Schwartz, a partner at Gibson Dunn who co-chairs the firm's labor and employment practice group. "And corporate America did not do a good job at explaining itself and its programs."