By Jonathan Stempel
NEW YORK (Reuters) – Starbucks was sued on Tuesday by the U.S. state of Missouri, which accused the coffee chain of using a commitment to diversity, equity and inclusion as a pretext to systematically discriminate based on race, gender and sexual orientation.
In a complaint filed in St. Louis federal court, Missouri accused Starbucks of tying executive pay to the company’s achieving racial and gender-based hiring quotas.
It also accused Starbucks of singling out preferred groups for additional training and job advancement prospects, and employing a quota system to ensure its own board of directors had a variety of racial and ethnic backgrounds.
“All of this is unlawful,” and violates federal and state civil rights laws, according to the complaint from Missouri Attorney General Andrew Bailey.
Bailey, a Republican, also contended that Missouri consumers pay higher prices and wait longer for services at Starbucks than if the Seattle-based chain employed the most qualified workers.
“We disagree with the attorney general and these allegations are inaccurate,” Starbucks said in a statement. “We are deeply committed to creating opportunity for every single one of our partners (employees). Our programs and benefits are open to everyone and lawful.”
U.S. President Donald Trump, also a Republican, has tried to shut down policies promoting diversity, equity and inclusion inside and outside the federal government, and some companies have taken action.
For example, the Wall Street bank Goldman Sachs on Tuesday canceled a policy to take companies public only if they had two diverse board members, generally defined as people from underrepresented demographics.
Last week, meanwhile, Google scrapped diversity-based hiring targets, while Amazon.com removed a reference to inclusion and diversity from its annual report.
Tuesday’s lawsuit challenged Starbucks policies adopted since 2020, after the murder of George Floyd, a Black man, by a Minneapolis police officer triggered unrest nationwide and led many companies to rethink employment practices.
Missouri said Starbucks’ alleged endorsement of quotas “should come as no surprise,” citing new Chief Executive Brian Niccol’s support of environmental, social and governance goals while leading the Chipotle burrito chain.
Starbucks employs about 211,000 people in the U.S. and 361,000 people worldwide.
In August 2023, a federal judge in Spokane, Washington dismissed a shareholder lawsuit challenging Starbucks’ diversity policies, saying the case addressed public policy questions best decided by lawmakers and companies, not courts.
Missouri’s lawsuit seeks to force Starbucks to end alleged discrimination based on race, gender and national origin; rehire and rescind discipline against employees affected by discrimination, and pay unspecified damages.
The case is Missouri ex rel Bailey v Starbucks Corp, U.S. District Court, Eastern District of Missouri, No. 25-00165.
(Reporting by Jonathan Stempel; Editing by Lisa Shumaker, David Gregorio and Marguerita Choy)
