Florida sues Target, citing stock losses tied to controversial DEI policies and social activism
Tallahassee, Florida – Florida Attorney General James Uthmeir has initiated a class-action lawsuit against the major retailer Target Corporation, headquartered in Minnesota. The lawsuit, announced this Thursday, represents the Florida State Board of Administration and is supported by America First Legal. The complaint accuses Target of misleading investors about the financial risks connected to its programs on diversity and inclusion.
Particularly stressing Target’s 2023 Pride Campaign, the case focuses on its diversity, equity, and inclusion (DEI) policies as well as its environmental, social, and governance (ESG) requirements. Target allegedly neglected to sufficiently reveal the possibility for customer reaction against these policies, which the Florida Attorney General’s office claims to be “extreme and radical.” According to the lawsuit, this lack of openness violated areas of the Securities Exchange Act of 1934.
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Target suffered what the complaint characterizes as “its worst performance and longest losing streak in 23 years,” following the controversial campaign. Over six months, the company’s stock value dropped dramatically—an estimated $25 billion in shareholder value disappeared.
Along with this financial crisis, a strong anti-LGBTQ+ campaign targeted the company on social media resulted in cases of vandalism and hindered store operations. Target consequently decided not to support Pride Month products in 2024 and to remove the most controversial things from its stores.
“Corporations that push radical leftist ideology at the expense of financial returns jeopardize the retirement security of Florida’s first responders and teachers. My office will stridently pursue corporate reform so that companies get back to the business of doing business—not offensive political theatre. We appreciate America First Legal’s assistance in the fight to keep Florida’s investments safe,” said Attorney General Uthmeier.
The lawsuit further claims Target misled investors by claiming it tracked social and political risks resulting from its DEI and ESG policies. The attorney general’s office claims, however, Target’s actual emphasis was more on associating with left-wing activist groups than on actually evaluating and reducing potential risks.
This legal case represents the second one America First Legal files against Target on such grounds. A past lawsuit is still pending after a federal judge last year turned down Target’s attempt to have it dismissed, implying that there might be grounds to believe Target broke federal securities laws.
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Target changed its DEI approach in response to the continuous debate and changing social scene. Originally started in response to the police killing of George Floyd in 2020, the company said it will be ending a program meant to assist Black employees and consumers. Target also intends to finalize its three-year cycle evaluations of its structured DEI targets.
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Reflecting a larger reevaluation of corporate diversity strategies amid a complex social and political environment, several other major brands, including Walmart, McDonald’s, Ford, Goldman Sachs, and John Deere, have also started to scale back their DEI commitments at the same time this legal and operational pivot is taking place.
