Over the last few years, Target has been the center of endless backlash and boycotts due to its multiple controversial business moves. These moves have turned this once-beloved family favorite retailer into one of America’s most hated companies by both left—and right-wing groups.
After Donald Trump was sworn into the U.S. presidency for the second time, he quickly began acting on his promises during his presidential campaign, especially those related to corporate America and social issues.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
That same month, President Trump signed an executive order to terminate Diversity, Equity, and Inclusion (DEI) mandates in the federal workforce, claiming they violated civil rights and discriminated against U.S. citizens.
Related: Corporate America faces major shake-up under Trump administration
DEI programs in the workplace were initially created to promote fair treatment for all people by eliminating discriminatory policies and practices and preventing others from arising in the future.
Even before President Trump’s executive order was signed, multiple major companies across all market sectors, such as Walmart, decided to end or scale back their DEI programs. After that, more joined in, including McDonald’s, Meta, and Amazon.
Target also decided to join the trend by announcing on Jan. 24 that it would cut down on various DEI initiatives this year, including ending its three-year-long DEI goals, concluding its Racial Equity Action and Change (REACH) initiatives, and changing the name of its “Supplier Diversity” team to “Supplier Engagement.”
Target has been criticized recently for dropping its DEI initiatives.
Target gets sued by its own shareholders for alleged deception and misleading programs
On Jan. 31, Target (TGT) was slammed with a class action lawsuit filed by the City of Riviera Beach Police Pension Fund on behalf of the retail company’s shareholders at the U.S. District Court for the Middle District of Florida, Fort Meyers Division, for allegedly violating federal securities laws.
As stated in the lawsuits, the investors claim that Target misled them by making false statements about its Environmental, Social and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) mandates, which caused the investors to lose money.
Related: McDonald’s sued over controversial DEI decision
This claim follows Target’s LGBT-Pride Campaigns in 2023 and 2024, which motivated the company to remove LGBT-themed merchandise from all its physical stores after receiving huge consumer backlash and boycotts. This controversial incident caused the company’s sales to fall for the first time in six years.
The lawsuit also references Target’s recent announcement that the company would end its DEI programs this year. These programs initially aimed to increase Black representation among its employees and businesses.
Angered Target investors want a refund for the company’s mistakes
The plaintiffs claim that the combination of all ESG and DEI incidents negatively affected Target’s business and led to a massive decline in its stock price, which the company has yet to recover from.
According to the lawsuit, Target allegedly failed to oversee or disclose the known risks of its 2023 and 2024 LGBT-Pride Campaigns. The suit claims statements in the company’s SEC filings and annual reports were misleading and caused Target’s investors to continue purchasing its stock at artificially inflated prices and unknowingly support the company’s “misuse of investor funds to serve political and social goals.”
More Retail News:
Chipotle isn’t worried about Mexican avocados amid tariffsDisney loses thousands of streaming subscribers for surprising reasonChina blacklists American clothing brand over shocking claims
The plaintiffs seek damages for Target’s alleged deceitful and misleading acts that took place from Aug. 26, 2022 to Nov. 19, 2024.
From the day the lawsuit was filed to Thursday’s market close, Target’s shares are down over 4%.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
