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Retailers maintain some DEI support despite public

rollbacks

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Legal risks influence DEI program decisions, say lawyers

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Some advocacy groups turn down corporate donations

By Nicholas P. Brown, Arriana McLymore

March 6 (Reuters) -

Several U.S. retailers that publicly scrapped diversity,

equity and inclusion programs - including Target ( TGT ), Amazon ( AMZN )

and Tractor Supply ( TSCO ) - are maintaining certain

efforts behind the scenes.

The three retailers, while they've ended DEI programs on paper,

have told advocacy groups and individuals they will continue to

offer financial support for some LGBTQ+ Pride and racial justice

events, as well as provide internal support for resource groups

for underrepresented employees.

These contradictions between public remarks to investors and

those made to individuals or small groups illustrate the

tightrope they've walked since U.S. President Donald Trump

deemed some elements of DEI illegal and threatened possible

investigations into firms that practice it. Advocates say DEI

programs aren't exclusionary policies, but are needed to redress

longstanding bias, inequity and discrimination, while detractors

counter people should be hired solely on merit without taking

into consideration gender or race.

Companies are "trying to thread the needle - stay true to

corporate values, satisfy various stakeholders, but reduce legal

risk," said Jason C. Schwartz, an employment law partner at

Gibson Dunn who advises corporate clients on their DEI policies.

Reuters conducted more than a dozen interviews with company

employees, advocates for underrepresented groups who've met with

corporate executives, and consultants advising companies on DEI

issues for this story. The developments they described haven't

been previously reported.

Tractor Supply ( TSCO ), which sells home and garden supplies and

clothing to farmers and ranchers, in June ended a DEI program

that had aimed to help put people of color in management roles

and boost funding to education programs for Black Americans. It

also ceased gathering data on its workforce for the Human Rights

Campaign's annual Corporate Equality Index, a benchmarking tool

that rates American businesses on their treatment of LGBTQ+

workers and customers. A Tractor Supply ( TSCO ) spokesperson told

Reuters it "remained steadfast" in its "purposeful decision to

remove perceived political and social agendas" from its

business.

But Keayana Robinson, the contractor who led the diversity

data collection at Tractor Supply ( TSCO ), told Reuters the retailer

offered to keep her on in an undefined role that would be "as

closely aligned as possible" to the DEI work she had been doing.

Managers assured her that Tractor Supply's ( TSCO ) inclusivity

initiatives - particularly its resource groups for

underrepresented employees - would continue, Robinson said.

"I don't want to work for an organization that wants to hide

me," she said.

Tractor Supply ( TSCO ) declined to comment on Robinson's account of

its conversations with her.

Target ( TGT ) in January ended its participation in the HRC survey, and

scrapped a DEI program that included a goal to increase the

number of Black employees by 20% over three years. A Target ( TGT )

spokesperson said the new approach "is all about driving

business results by increasing relevance with U.S. consumers and

making Target ( TGT ) a destination for talent."

After Target ( TGT ) rolled back its DEI program, Sharon

Smith-Akinsanya, CEO of corporate consultancy Rae Mackenzie

Group in Minneapolis, said she met with Target ( TGT ) executives,

including CEO Brian Cornell. Target ( TGT ) has long been a sponsor of

her career events in Minnesota for people of color, as well as

an event she organized honoring Black women of Minneapolis.

She said the meetings reassured her that Target ( TGT ) would keep a

commitment to diversity. "I believe the Target DNA we have come

to love remains intact," Smith-Akinsanya said, adding that she

understands the political threats companies are facing.

For some, the retailers' private pledges or actions to

continue to support diversity and minority groups don't go far

enough.

Twin Cities Pride Executive Director Andi Otto said

representatives of Minneapolis-based Target ( TGT ) called him to make

assurances that their inclusivity efforts would not change,

despite the "changing and current climate" of anti-DEI

sentiment. But his organization turned down a $50,000

sponsorship from Target ( TGT ) this year after nearly two decades of

partnering with the chain because of their changes in DEI

coupled with the company removing some Pride Month products in

2023.

Twin Cities Pride did not accept a sponsorship from Target ( TGT )

this year because the company would not specify how it would

continue to support LGBTQ+ shoppers and employees to the

organization's satisfactions, Otto said, calling Target's ( TGT ) move

away from DEI "problematic." Turning down Target's ( TGT ) money is a

form of protest, a move that he says sends a message to Target ( TGT )

that it can't have it both ways.

Similarly, when Black business leader Sheletta Brundidge learned

Amazon ( AMZN ) had rolled back some DEI programs, she dropped the online

retailer as a $10,000 sponsor of her annual Black Entrepreneurs

Day held at the Minnesota State Capitol. A company

representative tried to downplay the changes during a subsequent

phone call, according to Brundidge, but it did not change her

mind.

"We've been working to build a diverse team for many years

and are committed to continuing on that path," Amazon ( AMZN )

spokesperson Kelly Nantel said. "You'll see us continue to

inspect and evolve our programs to help us do this really

difficult work well." Amazon ( AMZN ) did not comment on Brundidge's

account.

'PICKING THEIR BATTLES'

Some companies are keeping DEI programs despite political and

legal risk. Investors at Apple ( AAPL ) voted against proposals

to curtail DEI during its shareholder meeting in February. A day

later, Trump said in a post on Truth Social that "Apple ( AAPL ) should

get rid of DEI rules." Apple ( AAPL ) did not immediately respond to

requests for comment, but the company's website says it is

continuing to "create a culture of inclusion, belonging, and

collaboration where everyone can do their best work."

Costco Wholesale ( COST ) shareholders in January voted down a

proposal to curb its DEI initiatives. A week later, 19

Republican attorneys general demanded Costco notify the states

within 30 days whether it will repeal its DEI policies or

provide an explanation for maintaining them. Costco did not

immediately return a message seeking comment.

But the list of companies removing DEI programs in recent

months has expanded to include Paramount, Walmart ( WMT ),

Lowe's, PepsiCo ( PEP ), McDonald's, John Deere

and others. Walmart ( WMT ), PepsiCo ( PEP ), Paramount and McDonald's

confirmed changing their DEI programs, while other companies did

not immediately comment.

Lawyers say that, as executives calculate which programs to

eliminate and which to keep, they're considering both legal and

political risks.

Although U.S. Attorney General Pam Bondi on Feb. 5

threatened to criminally prosecute companies with "illegal DEI"

programs that exclude individuals based on race or sex, she did

not explicitly define "illegal," lawyers say. In a memo, she

said her mandate does not prohibit "educational, cultural, or

historical observances ... that celebrate diversity," like Black

History Month.

Black Women Talk Tech co-founder Regina Gwynn said it is

seeing continued support from some companies that sponsor its

events for Black women founders and tech workers. But some

sponsors requested to have their names left off marketing

materials out of fear of political and legal retribution, she

said.

The programs most often retained, Gibson Dunn's Schwartz

said, are the ones tied to relationships with customers and

employees: sponsorships of events benefiting underrepresented

groups, employee groups that create a sense of community at

work, and cultural events like Black History Month.

"Companies are essentially picking their battles," he said,

"or trying to avoid battles altogether."