Bennett Nuss: Missouri v. Starbucks May Be the Blueprint for a Federal Anti-DEI Campaign

17 Jul 2025Bennett Nuss: Missouri v. Starbucks May Be the Blueprint for a Federal Anti-DEI Campaign

In the commentary below, Free Enterprise Project Associate Bennett Nuss encourages us to examine the line of attack that Missouri Attorney General Andrew Bailey is using in a complaint against Starbucks's Diversity, Equity and Inclusion (DEI) programs, noting "that there are a few concerning corporate practices which should be considered suspect in analogous cases, even if this specific case is thrown out on procedural grounds."

Read his entire piece below.

While analyzing a complaint prior to decision is the legal equivalent of soothsaying, there may be some merit in looking at the case presented by Missouri Attorney General Andrew Bailey in Missouri ex rel. Bailey v. Starbucks Corp. for an indication of how some jurisdictions may be looking at the legality of corporate DEI programs.

This complaint, filed in Federal District Court for the Eastern District of Missouri on February 11, 2025, cites several instances of alleged misconduct on the part of Starbucks, alleging that many of its diversity programs that it pursued from 2020-2024 constituted invidious discrimination based on race and sex. For sake of fairness, Starbucks has yet to make a substantive filing addressing the complaint's allegations, and filed a motion to dismiss Missouri's claim under Federal Rule of Civil Procedure 12(b)(1), (2), and (6) on April 7, 2025, which Missouri replied to on June 16, 2025. As of the time of writing, the Court has not ruled on the motion.

However, the line of attack selected by Missouri should be of interest to those who are invested in the future of corporate DEI programs. Some have excoriated the lawsuit as being predicated on Starbuck's workforce becoming "more female and less white." However, a sober look at the complaint indicates that there are a few concerning corporate practices which should be considered suspect in analogous cases, even if this specific case is thrown out on procedural grounds.

The first accusation levied by AG Bailey is that when Starbucks made a commitment to achieve "BIPOC (Black, Indigenous and People of Color) representation of at least 30 percent at all corporate levels and at least 40 percent of all retail and manufacturing roles by 2025" within its 2022 proxy statement, this statement showed their hand that diversity and equity goals by the company are (or at least were) pretextual for quota-based discrimination in hiring and promotion on the basis of protected class. Usage of quota to track corporate diversity goals were common in recent years, with 43% of companies "continu[ing] to maintain and promote quantitative, time-bound DEI goals" as of November 2024. The use of quotas to satisfy affirmative action goals was illegalized in 1978, and thirteen Attorneys General (including AG Bailey) signed a letter following the overturning of university affirmative action programs in Students for Fair Admission, to which the National Center for Public Policy Research (NCPPR) signed an amicus brief, arguing that the decision implicates corporate diversity practices. Starbucks was contemporaneously sued for this quota-based program by NCPPR in 2022, but the case was dismissed with prejudice on dubious grounds.

The second accusation is that corporate financial compensation being tied in part to the company's diversity goals resulted in officers engaging in discrimination. This section is the most technically complex, but for sake of simplification, corporate officers were allegedly given a bonus if Starbucks met its quantitative diversity goals company wide. Additionally, these directors' annual compensation would allegedly be tied to their personal involvement in an employee mentorship program in which the mentees were selected based on their involvement in affinity-based employee groups. The alleged provision of the incentive provides an indicator that Starbucks' quantitative adherence to quota, as executives received 102.8% of the target bonus payout. Additionally, Starbucks allegedly compels corporate officers who fail to meet diversity quota to suffer adverse employment action, although this allegation is not cited within the complaint. Thus, corporate officers were allegedly provided with financial compensation for implementing company policy which promoted invidious discrimination and punished for noncompliance. This malfeasance is allegedly ongoing, despite revisions to Starbucks' officer compensation programs in 2024.

The third accusation is that in allegedly favoring Starbucks' BIPOC and female employees for training and advancement, Starbucks discriminated against those employees not selected. The basis for this accusation is both in reference to the metrics before cited, but also in the extensive use of Starbucks' Partner Networks programs, affinity groups not necessarily organized by Starbucks itself, but formed by their employees of specific racial and sexual demographics. Leadership in these affinity groups were allegedly preferred by Starbucks for training and advancement, indicating preferential treatment based on affinity, although this accusation is not supported by citation in the complaint. While such organizations are not per se discriminatory, analogous organizations known as Employee Resource Groups (ERGs) exist in 90% of Fortune 500 companies, and leadership of these groups are compensated by their employer. If these groups really serve as means for Boards to have a plausibly deniable method to discriminate on the basis of protected class for employment decisions, then they should be scrutinized as such. The EEOC and DOJ have already published joint guidance online which indicates that exclusion from any ERG may constitute actionable discrimination.

While it is possible that the Eastern District of Missouri may decide that the Attorney General does not have standing to bring this suit for legalistic reasons too complex to discuss fruitfully here (or even in that the state has not convincingly alleged a real harm), this case's filing should constitute notice for companies who have engaged in analogous practices in recent years that their actions may constitute actionable discrimination. After all, the same exclusions that may prevent the Missouri AG from filing suit may not preclude suit from a class who believe themselves aggrieved by the company's actions or, notably, the Executive Branch. The Civil Division of the Department of Justice issued a memorandum on June 11, 2025, noting that the division would begin to enforce Executive Order 14173, specifically investigating "private-sector DEI preferences, mandates, programs, and activities."

The framework for attacking Starbucks' program in Missouri may just be a leading indicator of what a federal campaign against analogous programs may look like.

Bennett Nuss is an associate with the National Center for Public Policy's Free Enterprise Project.