Nineteen state attorneys general urged Costco to repeal what they called unlawful diversity, equity and inclusion (DEI) policies or explain why it would keep them. Their letter was a demand, not a court order or a ruling that Costco had broken the law. The dispute followed a shareholder vote in which Costco executives reported that more than 98% of shares voted opposed a proposal seeking a risk study of the company’s DEI initiatives.
What happened, in order
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Costco opposed a proposed DEI risk study. The National Center for Public Policy Research proposed that Costco assess financial risks related to its DEI initiatives. Costco’s board unanimously recommended that shareholders reject the proposal. In its message to shareholders, the board said its “commitment to an enterprise rooted in respect and inclusion is appropriate and necessary,” and that the requested report would not provide meaningful additional information. Associated Press reported the proposal and board’s position.
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Shareholders voted against the proposal. At Costco’s January 2025 annual meeting, executives shared preliminary results showing that more than 98% of shares voted opposed it, according to AP. This was the reported result for shares voted on that proposal—not a vote by every Costco shareholder or a public-opinion poll. It was a vote on whether to commission the requested risk report, not a legal decision about the company’s policies.
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Nineteen attorneys general sent a letter to Costco. The coalition urged the company to repeal what the officials described as unlawful DEI policies. It asked Costco within 30 days to notify the states that it had repealed them or explain why it had not. The letter, hosted by the Texas Attorney General, records the officials’ request and legal position; it was not a judicial order.
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Colorado’s attorney general disputed a broad reading of the legal argument. In February 2025, Phil Weiser argued that the Supreme Court decision cited in the letter addressed race-conscious university admissions and did not make every workplace inclusion effort illegal. His commentary was a legal position, not a court ruling on Costco. Weiser’s office published his statement.
What the attorneys general asked Costco to do
The letter asked Costco CEO Ron Vachris to take one of two actions within 30 days: notify the states that the company had repealed its DEI policies, or explain why it had not. The officials framed their request as a response to policies they considered unlawful. That characterization belongs to the attorneys general; the sources cited here do not establish that a court found Costco’s specific policies unlawful.
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The letter also quoted the Supreme Court as saying, “Eliminating racial discrimination means eliminating all of it.” Because the quotation appears in the letter, it is best attributed to the letter’s quotation of the Court rather than presented here as independently verified wording from the opinion.
What the shareholder vote did—and did not—decide
The proposal sought a company assessment of financial risks associated with DEI initiatives. Costco’s board opposed producing that report, and the preliminary meeting result reported by AP showed more than 98% of shares voted against the proposal. That outcome indicates the proposal did not receive shareholder support; it does not, by itself, determine whether any particular DEI practice is lawful or disclose the views of shareholders who did not vote.
The proposal’s proponent, the National Center for Public Policy Research, advanced its own position about risk. That advocacy is not an independent finding that Costco faced a particular financial or legal risk.
How the competing legal arguments differ
| Question | Attorneys general’s letter | Colorado AG Phil Weiser’s commentary |
|---|---|---|
| Scope | Applied the officials’ legal concerns to Costco’s workplace DEI policies. | Emphasized that the cited Supreme Court decision concerned university admissions, not every workplace inclusion effort. |
| Conduct at issue | Urged repeal of policies the officials called unlawful. | Distinguished race-based preferences or quotas from identifying and removing barriers to hiring and promotion, which he said employers may do without denying opportunities based on protected characteristics. |
| Authority and status | An official request and legal assertion by 19 state attorneys general; not a court judgment. | A state attorney general’s legal analysis; not a court ruling about Costco. |
These positions identify a dispute over how far the university-admissions ruling reaches in the workplace. They do not resolve the legality of every specific Costco practice. The sources discussed here report no court finding that Costco violated the law.
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What is known about Costco’s response and current policy
The sources cited here do not establish how Costco responded to the attorneys general’s letter or what its current DEI policy is. Costco correspondence filed with the SEC on September 15, 2025, concerns a separate shareholder proposal about climate commitments for the 2026 annual meeting; it does not answer either question. The SEC filing is available here.
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