DEI Lawsuit Against Target Will Go Forward

According to an article on ESG Dive, Target Corporation’s motion to dismiss a DEI lawsuit and move the case from the U.S. District Court for the Middle District of Florida to a court in Target’s home state of Minnesota has failed. The suit, Craig v. Target Corp, alleges that the company’s 2023 Pride campaign “tanked the brand’s profits and that Target failed to warn of the risk of ‘adverse reactions'” in its SEC filings website. 

The DEI lawsuit was filed in August of 2023 by the conservative advocacy group America First Legal. The complaint argues that customer and investor backlash against a DEI mandate was foreseeable but was not disclosed in the filings. 

However, at the same time, the ESG Dive article notes that the Target disclosure maintained that failure to reach DEI goals would impact its business. 

In a statement, AFL’s senior vice president Reed D. Rubinstein calls the court’s decision a warning and suggests the group will go after companies that do not disclose the market risk of both ESG and DEI initiatives in their shareholder reports. He emphasized that federal securities laws require transparent disclosure of market risks arising from management’s use of shareholder resources to promote specific social or political agendas.