Costco’s board of directors is urging shareholders to vote against a proposal that would eliminate the wholesale retailer’s Diversity, Equity and Inclusion (DEI) program.

“Our success at Costco Wholesale has been built on serving our critical stakeholders: employees, members and suppliers. Our efforts around diversity, equity and inclusion follow our code of ethics: to to our employees, these efforts are based on inclusion, having all of our employees feel valued and respected,” the board of directors wrote in a message to investors previously reported by The Hill “Our diversity, equity and inclusion efforts remind and reinforce with everyone at our company the importance of creating opportunities for everyone. We believe these efforts enhance our ability to attract and retain employees who will help our business to succeed. This capability is critical because we owe our success to our more than 300,000 employees worldwide.”

The message was sent ahead of Costco’s annual meeting of shareholders scheduled for January 23, 2025.

Shareholders will vote on a proposal filed by the National Center for Public Policy Research that challenges the legality of Costco’s DEI program after the Supreme Court’s ruling in SFFA vs. Harvard that racial discrimination in college admissions violates the Equal Protection Clause of the 14th Amendment.

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The proposal cites how attorneys general in 13 states have warned Fortune 100 companies that the ruling implicated corporate DEI programs and a number of lawsuits have been filed.

Customers enter a Costco Wholesale Corp. warehouse. in Hawthorne, California on June 12, 2024. (PATRICK T. FALLON/AFP via Getty Images/Getty Images)

Companies that have since rescinded DEI commitments and/or laid off employees from DEI departments include Alphabet, Meta, Microsoft, Zoom and John Deere, the proposal says, though Costco’s board says Microsoft later clarified that it had eliminated two redundant DEI roles, but its focus on diversity and inclusion “remains unwavering.”

“And yet Costco still has this program, even though it was shy enough to admit it, as it recently and quietly changed the name of its DEI program to ‘People and Communities,'” the National Center wrote for Public Policy Research in its shareholder proposal. “But putting a new label on discriminatory practices does not protect Costco and its shareholders from those risks.”

The foundation complained that Costco’s rebranded program still openly expresses a “commitment to equity,,” which he argues means equal outcomes, not equal opportunity, and that the company still has a “chief diversity officer,” still has a supplier diversity program that selects suppliers based on their race and gender, still appears to take into account race and gender hiring and promotion “and still funnels shareholder money to organizations that advance DEI’s discriminatory agenda.”

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Customers wait in line to shop at a Costco store on December 11, 2024 in Novato, California. (Justin Sullivan/Getty Images/Getty Images)

“With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of unlawful discrimination because they are white, Asian, male or straight,” the proposal argues. “Accordingly, even if only a fraction of these employees were to file a lawsuit, and only some of them were successful, the cost to Costco could be in the tens of billions of dollars.”

Despite the Supreme Court’s ruling, Costco’s board of directors stated that its DEI practices “are legally appropriate, and nothing in the proposal demonstrates otherwise.” The board also said the National Center for Public Policy Research’s request for a study of Costco’s DEI practices “reflects a political bias” and threatens to strain the company’s resources.

Citing a 2023 federal district court decision, the board argued that “the broader agenda of the National Center for Public Policy Research is not to reduce risk to the company but to abolish diversity initiatives “. The board affirms that the foundation continues its “shareholder activism,” noting how the National Center for Public Policy Research has previously expressed a commitment to “fight” against “the evils of politicized capital woke up and companies”.

A Costco store on July 11, 2024 in Richmond, California. (Justin Sullivan/Getty Images/Getty Images)

“We welcome members from all walks of life and backgrounds. As our membership becomes more diverse, we believe serving you with a diverse group of employees improves satisfaction,” Costco’s board wrote, defending its practices GOD “Having diversity in our supplier base, including appropriate attention to small businesses, is beneficial for many of the same reasons that diversity benefits our company. We believe it fosters creativity and innovation in merchandise and services we offer to our members”.

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Fox News Digital reached out to Costco and the National Center for Public Policy Research for additional comment.

“DEI is the redistribution of opportunity, for employees, potential employees and suppliers, on the basis of race and sex,” said Ethan Peck, deputy director of the National Research Center’s Free Enterprise Project of Public Policy, in a statement. “This is not only unethical, it is illegal and risks future litigation. It also involves sacrificing merit and therefore excellence and innovation (that the company has a fiduciary duty to the shareholders of maximize to the maximum) the alter of arbitrarily determined diversity”.