Judge: Target Must Face Investor Lawsuit Following “LGBT” Backlash

Ryan J. Farrick — December 6, 2024

A Target store in Connecticut. Image via Flickr/user:jeepersmedia. (CCA-BY-2.0).

America First Legal, the right-wing advocacy organization behind the lawsuit, said that the court’s ruling should serve as a “warning to publicly traded corporations’ boards and management.” The group asserted that the inherent risk of pushing certain DEI initiatives cannot and should not be “whitewashed with boilerplate language or ignored.”

A federal judge in Florida has determined that Target must face a lawsuit alleging that the multibillion-dollar retailer misled shareholders after sales of LGBT-themed merchandise sparked a backlash and consumer boycott.

According to Reuters, U.S. District Judge John Badalamenti ruled that the plaintiffs have thus far presented enough evidence to continue litigating their claims against the chain.

The lawsuit, first filed by investor Brain Craig, broadly alleges that Target’s board prioritized activist calls to promote diversity, equity, and inclusion. However, in doing so, Craig and his attorneys claim that the company failed to consider the potential for backlash.

America First Legal, the right-wing advocacy organization behind the lawsuit, said that the court’s ruling should serve as a “warning to publicly traded corporations’ boards and management.” The group asserted that the inherent risk of pushing certain DEI initiatives cannot and should not be “whitewashed with boilerplate language or ignored.”

Target, for its part, had asked Badalamenti to dismiss the lawsuit. In its own filings, the company said the plaintiffs have yet to provide any compelling evidence in support of their position.

Target Store; image courtesy of Mike Kalasnik via Wikimedia Commons, https://commons.wikimedia.org/

Furthermore, Target claims that it did, in fact, warn investors about potential backlash.

Craig’s complaint, Target says, has more to do with his personal opposition to DEI policies than with the company’s disclosures.

“The securities laws protect investors against being defrauded,” Target wrote in a November filing. “They are neither vehicles for expressing disapproval, nor do they insure investors against ordinary market losses.”

Earlier this year, in May, Target reiterated its support for perceptibly vulnerable communities.

“Target is committed to supporting the LGBTQIA+ community during Pride Month and year-round,” a Target spokesperson said in a May statement. “Most importantly, we want to create a welcoming and supportive environment for our LGBTQIA+ team members, which reflects our culture of care for the over 400,000 people who work at Target.”

“We have long offered benefits and resources for the community, and we will have internal programs to celebrate Pride 2024,” Target added.

But opposition to DEI initiatives in 2023 did lead to Target pulling many transgender-oriented products from its shelves. Some conservative influencers and critics even went so far as to record themselves entering Target stores to harass employees and vandalize product displays.

Target’s apparent backpedaling was criticized by the Human Rights Campaign, among other organizations, which said that Target and other “companies need to understand that community members and allies want businesses that express full-hearted support for the community.”