Florida filed a lawsuit against Target on Thursday, accusing the company of misleading investors by failing to disclose the financial risks associated with its LGBTQ Pride merchandise line after the collection sparked conservative boycotts two years ago. The lawsuit is the latest in a series of Republican-led legal challenges to corporate diversity, equity, and inclusion (DEI) initiatives.
“This is a frivolous suit in blatant violation of the First Amendment,” LGBTQ legislative researcher Allison Chapman told Truthout. “The goal is to have a chilling effect that warns retailers if they sell anything for Pride, they could face legal repercussions.”
The State Board of Administration of Florida, which manages public pension funds that hold Target stock, filed the securities fraud lawsuit in federal court in Fort Myers. This marks the first time a U.S. state has sued a corporation over alleged mishandling of DEI policies under shareholder protections, according to Reuters.
“The lawsuit is wrapped in a technical securities regulation argument but at the core of it, they’re effectively saying Target knew this country was bigoted and not catering to those bigotries and warning of the risk was fraudulent on the part of their investors,” civil rights attorney and Harvard Law School Cyberlaw Clinic instructor Alejandra Caraballo said on Bluesky.
In May 2023, Target became a focal point of right-wing outrage after launching its annual Pride Month collection, which included items for transgender customers. Anti-LGBTQ groups fueled the backlash, spreading misinformation and organizing boycotts that escalated into threats and harassment against store employees. Under mounting pressure, Target removed some products, with CEO Brian Cornell citing concerns for staff safety. The decision drew criticism from LGBTQ advocates, who saw it as a capitulation to extremist intimidation. By May 2024, Target had further scaled back its Pride displays, limiting them to about half of its nearly 2,000 stores.
Last month, Target also joined several major corporations retreating from diversity initiatives following Trump’s return to power. In a company memo, Target announced plans to shut down its Racial Equity Action and Change program and withdraw from external diversity-related assessments, including the Human Rights Campaign’s Corporate Equality Index, The Advocate reported in January. The decision sparked immediate backlash. Civil rights advocates and social media users called for a boycott, with Georgia pastor Dr. Jamal Bryant urging his congregation to participate in a “40-day fast” from Target. According to Axios, Bryant aims to rally 100,000 participants and has already secured commitments from more than half that number.
This rollback of DEI initiatives has had financial consequences for the company. “[T]he lawsuit fails to note the $15B in losses that Target has seen since it reversed its policies,” Chapman notes.
Target is not the only corporation facing legal action over diversity policies. Last week, Missouri sued Starbucks, with Republican Attorney General Andrew Bailey alleging that the company’s DEI policies, which promote the hiring and advancement of people of color and women, violate anti-discrimination laws. In response, Starbucks denied the allegations, stating that its hiring practices are “designed to ensure the strongest candidate for every job every time.”
Costco has also been targeted by anti-DEI probes. On January 27, a coalition of 19 Republican-led states sent a letter to Costco, demanding that the company either retract its DEI policies or justify their continuation within 30 days. The letter cited Trump’s executive order urging corporations to scale back DEI efforts, as well as the Students for Fair Admissions v. Harvard decision, in which the Supreme Court struck down affirmative action in higher education. Despite political pressure, Costco’s shareholders overwhelmingly rejected a January proposal that would have required the company to assess potential risks associated with its DEI policies.
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