OPINION:
Walmart executives scuttled the company’s diversity, equity and inclusion programs last week, becoming the latest corporate giant to drop extreme politics after public outcry.
Others on the Fortune 500 list, such as Coors and Boeing, have also rescinded DEI operations in recent months after criticism from activists such as conservative documentarian Robby Starbuck.
Employees and customers should cheer the retreat from racial discrimination caused by DEI — such as hiring and promotion policies based on race — but how are the other 497 companies on the Fortune list faring?
Not well.
A review of the Fortune 500 list finds that 486 businesses still have a statement, report or other advocacy material on DEI or its ideological-cause twin, ESG (“environmental, social and governance”). Despite Walmart’s announcement released before Thanksgiving, the company still has a webpage for “Racial Equity & Inclusion.”
Some companies, such as the pet services company Chewy, do not prominently host DEI information on their websites, but Chewy posted a job listing on LinkedIn for a director of DEI at its office in Washington state.
DEI sounds benign, welcoming even, but the policies that follow are anything but. In fact, Florida Attorney General Ashley Moody asked the state commission on human relations to investigate the coffee giant Starbucks (number 116 on the Fortune 500) based on evidence of hiring practices that were based on racial quotas, which are violations of Title VII of the Civil Rights Act of 1964.
In 2023, attorneys general in 13 states issued warnings to the top 100 companies on the Fortune 500 list about corporate policies such as race-based “employment preferences” as part of DEI programs. One year later, in June 2024, Sen. J.D. Vance introduced a proposal to eliminate DEI policies from federal agencies. The Ohio Republican (and future vice president-elect) rightly called DEI a “destructive ideology that breeds hatred and division.”
C-suite executives should be on notice. After a 2023 Supreme Court ruling against racial preferences in college admissions, observers recognized that the prohibition on colleges making race a central component in admissions decisions would have implications for corporations.
Kenji Yoshino and David Glasgow, law professors at New York University, wrote in the Harvard Business Review, “When the right case reaches the court, the same justices who just endorsed a ‘colorblind’ approach to higher education could also hold that private employers cannot consider race, sex, or other protected characteristics in workplace decisions.”
DEI advocates struggle to defend the policies because, aside from clear evidence of discrimination, they cannot describe what DEI represents or accomplishes. One business journal describes DEI has having “evolved into a rather amorphous field where the very word [diversity] invokes a variety of meanings and emotional responses.”
For the purposes of civil rights law, executives can call DEI whatever they want — “belonging,” “social justice,” whatever. But if the policies that follow result in racism, the practices are still racist and illegal.
Conservative activists such as Mr. Starbuck deserve credit for challenging Tractor Supply (no. 293), John Deere (no. 64) and others on social media and elsewhere for their DEI practices. The exposure resulted in backlash on X and other platforms, and moved the companies to abandon the policies.
Other companies appear to be paying attention, both to social media and the Supreme Court decision against racial preferences: Microsoft (no. 13) issued a statement in July saying DEI is not “business critical” and that the company would be winding down its DEI initiatives.
Federal and state lawmakers are increasingly aware that discriminatory human resource policies are the downstream result of corporate commitments to DEI. The Department of Justice and state attorneys general should continue to investigate claims that businesses are discriminating against individuals based on immutable characteristics.
CEOs should follow Walmart’s example and scrap DEI policies as a gift to all Americans, just in time for the holidays.
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Jonathan Butcher is the Will Skillman senior fellow in education at The Heritage Foundation.
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