The last several years have seen increased legal scrutiny of DEI. Largely driven by the anti-ESG movement, state and federal regulators have argued that DEI programs violate civil rights laws. Public sector programs and those of many colleges and universities have come under attack. We’ve expected these efforts to reach into the private sector as well. That may prove more difficult than anti-ESG anticipated, as the state of Missouri saw its flagship case against Starbucks dismissed. Missouri argued that Starbucks’ DEI policies designed “to advance racial and social equity” violated Title VII of the Civil Rights Act of 1964. A federal judge disagreed, granting Starbucks’ motion to dismiss and stating in the Opinion:
“It is unclear from the complaint whether any Missourian has actually been injured by Defendant’s practices. Plaintiff did not point to even a single Missouri resident who lacked ‘Starbucks’ preferred racial or sex characteristics’ and suffered an adverse employment action as a result. Plaintiff contends that its complaint establishes ’employment discrimination against thousands of people,’ but the most the complaint establishes is that Defendant employs a large number of Missourians. The Court cannot reasonably draw the inference that any of them have been harmed simply because of Defendant’s alleged DEI policies, as Plaintiff leaves to the imagination the actual enforcement and implementation of these policies.”
Essentially, Missouri lost this case because it could not prove that any Missouri residents were actually harmed by Starbucks’ DEI policies. Anti-ESG was hoping this case would turn into a blueprint for states to challenge private company DEI policies, but the legal theories in this case fell short. The judge acknowledged the significance of this case in Missouri’s anti-DEI strategy, stating:
“In this case, Plaintiff attempts to forge a path for the State of Missouri to challenge the implementation of DEI policies by private companies operating within the state. However, the well-established doctrines of standing at issue here do not allow this quest to proceed under the minimal allegations presented. While the complaint does enough to establish personal jurisdiction, Plaintiff’s success ends there.”
We’ll see if the Missouri Attorney General attempts to appeal the decision. However, given the deficiencies in the complaint, an appeal may be an uphill battle. Speaking of uphill battles, anti-ESG may be facing quite a few. Check out the rest of today’s blogs to see two more examples of anti-ESG losing in the courtroom.
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