New York (CNN) — Missouri sued Starbucks this week, alleging the chain’s push to hire and promote more people of color and women violated anti-discrimination laws and slowed down coffee orders.
The lawsuit, filed by Missouri Attorney General Andrew Bailey, a Republican, opens up a new legal front in the war on diversity in corporate America. It aims to strike down the most common diversity, equity and inclusion (DEI) programs that Starbucks and other businesses use to expand opportunities for minorities, women and historically underrepresented groups.
The legal challenge to Starbucks is an early sign of aggressive litigation seeking to roll back DEI by emboldened GOP-led states, private employees and federal agencies under President Donald Trump, legal experts say.
“This is one of the first broadside attacks against the full menu of corporate DEI programs,” said Jason Schwartz, an attorney at Gibson Dunn.
Starbucks denied Missouri’s allegations and said its policies were “designed to ensure the strongest candidate for every job every time.”
Missouri’s suit comes as the Trump administration dismantles DEI efforts in the federal government and companies face significant pressure to change or abandon their policies. Trump signed an executive order threatening federal investigations for “illegal DEI,” and Attorney General Pam Bondi last week issued a memorandum promising that the Department of Justice would enforce these efforts, including criminally.
Companies generally see DEI as good for business, and they are caught between pursuing these efforts and avoiding a conservative legal crackdown. Many businesses are uncertain which of their DEI programs would constitute “illegal DEI,” and they have been scrambling to review their policies, corporate lawyers have told CNN.
“The Missouri v. Starbucks case is the crystallization of the litigation risks that companies now face in light of the Trump administration’s offensive against what it defines as ‘illegal DEI,’” said Aaron Goldstein, an attorney at Dorsey & Whitney. Bondi is “promising support” for lawsuits like the one Missouri is bringing against Starbucks.
‘Novel argument’
Missouri’s suit alleges that Starbucks’ mentorship programs connecting minority employees to senior company leaders, its goal of achieving 30% minority representation at all corporate levels and 40% of all retail and manufacturing jobs by 2025, and its other programs to increase diversity are a “mere pretext for its actual commitment to unlawful discrimination.”
The suit said that Starbucks “incentivizes discriminatory quotas” by tying some executive bonuses to diversity and inclusion goals and that the company has “discriminatory” programs, such as employee resource groups and commitments to disclosing the diversity of its workforce. (Starbucks investors voted to eliminate the executive compensation policy in 2024, and Starbucks’ employee resource groups are open to all employees.)
The suit also accuses Starbucks of making hiring decisions based on race, rather than merit, which Missouri claims leads to “more mistakes” on the job and higher costs for consumers.
“Missouri’s consumers are required to pay higher prices and wait longer for goods and services that could be provided for less had Starbucks employed the most qualified workers,” regardless of their race, gender or national origin, the lawsuit said.
“Our programs and benefits are open to everyone and lawful,” Starbucks said in a statement to CNN. “Our hiring practices are inclusive, fair and competitive and designed to ensure the strongest candidate for every job every time.”
Missouri seeks to build on the Supreme Court’s ruling in 2023 striking down affirmative action in college admissions and apply it to employment decisions.
Alleging Starbucks’ practices harmed Missouri residents’ coffee orders is a “novel argument for enforcement” under the 1964 Civil Rights Act prohibiting employment discrimination, said Becky Baker, an attorney at Vinson & Elkins.
DEI programs under threat
Legal experts are skeptical of Missouri’s suit, but they expect companies to change many of their DEI programs.
Programs that are not open to all employees because of race or other criteria, any numerical goals or targets, and executive compensation tied to diversity targets are most vulnerable, they say.
But Missouri’s case is a “stretch” and “bites off more than it can chew,” said Jason Schwartz from Gibson Dunn.
The suit presumes that all DEI policies are exclusionary, even if they seek to widen a company’s usual hiring pool and are available to all employees.
“It paints with a broad brush, arguing that virtually every diversity program is illegal even if open to all. This is not the law,” Schwartz said. “I don’t think a court will find employee resource groups that are open to all are illegal.”
Missouri Attorney General Bailey said in a statement this week that he had a “responsibility to protect Missourians from a company that actively engages in systemic race and sex discrimination.”
Starbucks and other companies have expanded efforts to promote workforce diversity in recent years to expand their customer base, improve employee retention and prevent discrimination lawsuits. Companies believe DEI programs are good for their bottom lines.
“We are expanding workforce diversity to bring new perspectives and experiences that improve our business and workplace,” Starbucks says on its website.
White women have been the biggest beneficiaries of diversity programs in the workplace, scholars say.
But these efforts are broadly under attack, and some companies are pre-emptively retreating.
Many companies, such as Target, McDonald’s, Meta and Amazon, have recently changed their DEI programs under pressure from right-wing activists and the Trump administration. The Federal Communications Commission this week ordered an investigation into Comcast’s DEI practices.
Although the law has not changed, the Trump administration has re-interpreted anti-discrimination law, and companies are gearing up for legal fights over what was previously thought to be settled law.
Even if companies prevail in lawsuits, the cases alone can be damaging to companies in their own right. Litigation is costly for companies, and they carry liability risks. Missouri, for example, is entitled to review emails and other internal communications about Starbucks’ hiring practices and decisions, said Aaron Goldstein from Dorsey & Whitney.
“Companies may have internal communications suggesting, or even confirming, that some hiring or promotion decisions were made on the basis of race or gender, which would violate federal anti-discrimination laws,” he said. Employers need to review their diversity policies and internal communications, he said — and prepare for more lawsuits like this.
The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
