The State Board of Administration of Florida sued Target on Feb. 20, accusing the retail giant of knowingly misleading and defrauding investors by promoting diversity, equity, and inclusion (DEI) initiatives that prompted customer backlash and hurt sales.
Florida’s new Attorney General James Uthmeier filed the lawsuit in the U.S. District Court for the Middle District of Florida on behalf of the board, which oversees public pension funds that own Target stock.
Target faced widespread backlash in 2023 over its decision to release LGBT-themed merchandise for children during Pride Month. Among the items for sale nationwide were clothing for newborns and books explaining how to use pronouns.
Target scaled back its LGBT merchandise and displays after customers boycotted the store and some employees expressed safety concerns following in-store confrontations.
The fallout from Target’s campaign erased $10 billion in market value, while shareholder value declined by $25 billion over six months. Target’s annual revenue declined in 2023 compared to the previous year.
The legal filing states that Target violated the Securities Exchange Act by failing to disclose “the known risks” of consumer backlash to its DEI and Pride Month initiatives and environmental, social and governance (ESG) mandates, which led to its “disastrous 2023 children-and-family-themed LGBT-Pride campaign” and resulted in shareholder losses.
It further alleges that Target actively misled investors by assuring them—via its 2022 and 2023 annual proxy statements—that it was monitoring the social and political risks posed by its DEI and ESG initiatives.
“In reality, the Board, both itself and through the applicable Board committees, only monitored risks it perceived from failing to achieve its self-imposed ESG/DEI mandates,” the lawsuit states.
Target Rolls Back DEI Initiatives
The legal filing also accuses Target of betraying its core customer base of working families.
“No rational board of directors or management of a retailer with a core customer base of working families would have approved such a nationwide campaign; nonetheless, Target’s officials pursued it,” the lawsuit stated.
The Epoch Times contacted Target for comment but did not receive a response by publication time.
Target announced in January that it would roll back its DEI initiatives, following in the steps of other major U.S. retailers like Amazon and Walmart.
A fact sheet posted to its official website said the company would also end its “Racial Equity Action and Change (REACH)” initiatives in 2025 as planned and stop “all external diversity-focused surveys, including HRC’s Corporate Equality Index,” referring to the LGBT group Human Rights Campaign.
The retail giant also stated that it would start evaluating its corporate partnerships and ensuring employee resource groups are focused on mentorship and community development.
“Throughout 2025, we’ll be accelerating action in key areas and implementing changes with the goal of driving growth and staying in step with the evolving external landscape. We will continue to monitor and adjust as needed,” the retailer said.
Reuters and The Associated Press contributed to this report.
From The Epoch Times
