Conservative Starbucks investor loses diversity challenge

By Jody Godoy

(Reuters) -A U.S. judge on Friday dismissed a conservative activist investor’s lawsuit against Starbucks (NASDAQ:)’ board, opposing the company’s diversity, equity and inclusion policies and calling it frivolous.

The National Center for Public Policy Research (NCPPR) sued in August 2022 over Starbucks’ setting hiring goals for Blacks and other people of color, awarding contracts to “diverse” suppliers and advertisers, and tying executive pay to diversity.

The nonprofit, which holds around $6,000 in Starbucks stock, said those policies require the company to make race-baced decisions that violate federal and state civil rights laws.

Chief U.S. District Judge Stanley Bastian in Spokane, Washington, rejected the allegations at a hearing in the case on Friday, saying the lawsuit centered on public policy questions that are for lawmakers and corporations, not courts, to decide.

“If the plaintiff doesn’t want to be invested in woke corporate America, perhaps it should seek other investment opportunities rather than wasting this court’s time,” he said.

The lawsuit is similar to those recently by conservative activist groups opposing corporate diversity and inclusion efforts in the wake of a June Supreme Court ruling.

The ruling declared unlawful the race-conscious student admissions policies used by Harvard University and the University of North Carolina.

On Friday, Daniel Morenoff of The American Civil Rights Project argued that Starbucks policies seeking to increase racial diversity among its suppliers, vendors, and employees were discriminatory and that NCPPR’s cause was in the corporate interest.

Bastian rejected that argument, saying the group’s complaint did not represent the interests of Starbucks shareholders and failed to follow required legal procedure.

NCPPR may not refile its complaint, and Starbucks may seek legal fees, he said.

The case is Craig v. Target Corp. (NYSE:) et al., No. 23-00599, U.S. District Court, Middle District Of Florida.