Starbucks Execs, Directors Face Diversity Lawsuit

Starbucks Corp executives and directors have been sued by a conservative think tank, which claims that the coffee chain's efforts to promote diversity amount to racial discrimination.

Source: Reuters | Published on September 1, 2022

The National Center for Public Policy Research filed a complaint on Tuesday, objecting to Starbucks' setting hiring goals for Blacks and other people of color, awarding contracts to "diverse" suppliers and advertisers, and tying executive pay to diversity.

The plaintiff, a Starbucks shareholder, claimed that the company's policies force it to make race-based decisions that benefit minorities, which violate federal and state civil rights laws.

The defendants include 35 current and former Starbucks executives and directors, including interim CEO Howard Schultz.

According to the complaint, the diversity push "benefits them personally by allowing them to pose as virtuous advocates of 'Inclusion, Diversity, and Equity,' even as it harms the company and its owners."

Starbucks did not immediately respond to requests for comment on Wednesday.

As of July 3, the Seattle-based company had 34,948 stores worldwide, with 17,050 in North America.

Many businesses have increased their emphasis on diversity and training, particularly in the aftermath of the May 2020 killing of George Floyd by a Minneapolis police officer.

Starbucks announced in October 2020 that it would aim for Black, indigenous, and other people of color to hold at least 30% of U.S. corporate jobs and 40% of U.S. retail and manufacturing jobs by 2025, and would tie executive pay to its diversity efforts.

Then, in January, Starbucks announced plans to nearly double its annual spending with diverse suppliers and vendors to $1.5 billion by 2030, as well as allocate 15% of this year's advertising budget to minority-owned and "targeted" media companies.

The lawsuit was filed in Spokane, Washington, on Tuesday.

It seeks to overturn Starbucks' diversity policies and have the defendants or their insurers pay the company damages.

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