By Saijel Kishan and Jeff Green | Bloomberg

Nineteen Republican attorneys general called on Costco Wholesale Corp. to end its workforce diversity policies after the bulk retailer became one of the few companies to defend its practice.

The state officials, including those from Texas, Alabama and Kentucky, said in a letter to Costco Chief Executive Officer Ron Vachris on Monday that the retailer’s decision to defend its diversity, equity and inclusion efforts goes against the Supreme Court’s 2023 ruling against affirmative action in university enrollment. The ruling doesn’t apply to companies.

“I’m putting Costco on notice to do the right thing and eliminate discriminatory DEI,” Iowa Attorney General Brenna Bird said in a separate statement.

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Last week, Costco fought off an investor proposal at its annual shareholder meeting from a conservative group seeking details of the risks attached to so-called DEI policies. The company defended the legality of its DEI programs, saying its “commitment to an enterprise rooted in respect and inclusion is appropriate and necessary.” Costco declined to comment on the letter.

The pushback from state Republicans comes as President Donald Trump’s new administration lashes out at DEI programs and tries to eliminate them in the federal government and corporate America. Walmart Inc. and Meta Platforms Inc. are among companies that have rolled back DEI programs in recent weeks under pressure from conservatives.

The executive order used vague language to discourage what it said was “illegal DEI” programs, causing confusing and spurring corporate leaders and lawyers to try to decipher what that means.

Advocates for diversity programs say that diverse teams are positive for companies in myriad ways, including by helping with talent retention and by helping firms better understand their customers.

Costco doesn’t list many specific DEI programs in its corporate materials. One initiative is a supplier program it started in 2005 that’s designed to “partner with community organizations to identify qualified diverse suppliers to support our business.” Others include philanthropic engagements and employee development goals that “provide all employees with training, education and opportunities for career development.”

The attorneys general, which include those from Texas and Georgia, are demanding Costco say within 30 days whether it has repealed its DEI policies or explain why it hasn’t done so.

The move comes after Texas Attorney General Ken Paxton last week asked Wall Street firms to answer questions about their DEI measures.

–With assistance from Jaewon Kang.

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