Target Faces Lawsuit Over Alleged Misleading DEI Initiatives and Shareholder Defrauding

Target Corp is under fire for allegedly misleading its shareholders regarding the risks tied to its diversity and social responsibility initiatives, resulting in consumer backlash and a dramatic drop in stock value. A class action lawsuit, filed on February 3 by the City of Riviera Beach Police Pension Fund, accuses the Minneapolis-based retailer of defrauding investors by inflating the true value of its stock, while diverting funds for what they call “political and social goals” under the guise of diversity programs.

The lawsuit claims Target’s management, including CEO Brian Cornell, failed to properly disclose the potential for boycotts tied to its Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) efforts. Among the most controversial elements cited is Target’s 2023 Pride Month campaign, which led to store protests and even caused some employees to feel unsafe, prompting the removal of certain LGBTQ-themed products from the shelves.

Target’s stock took a significant hit in November 2024, when it dropped 22%, erasing approximately $15.7 billion in market value, after the company forecasted disappointing holiday sales. Shareholders argue that the decline starkly contrasts with the performance of competitors like Walmart, highlighting the ongoing fallout from the retailer’s social justice initiatives.

The lawsuit, filed in federal court in Florida, seeks damages for shareholders who held Target stock between August 2022 and November 2024. This legal action follows Target’s announcement in January 2025 that it would scale back its DEI programs, including a significant initiative supporting Black-owned businesses, which was launched in response to the 2020 killing of George Floyd.

Target, along with other major corporations such as Walmart and Amazon, has come under scrutiny from conservatives for these initiatives, leading to some scaling back of DEI efforts.

The lawsuit, now in its early stages, is officially known as City of Riviera Beach Police Pension Fund v. Target Corp et al, in the U.S. District Court, Middle District of Florida.

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