Any sports fan knows the agony of “snatching defeat from the jaws of victory.”
The turnover deep in the red zone, the untimely foul that sends the wrong guy to the free throw line with mere seconds left on the clock, or the bouncing ball through Bill Buckner’s wickets leave a mark that always has more staying power than any victory parade ever could.
Democratic attorneys general and even shareholders are now pressuring Walmart CEO Doug McMillon to bring about that very pain at the nation’s largest brick-and-mortar retailer.
Sent the week before President Trump’s inauguration, the two letters call upon McMillon to consider re-adopting the same highly divisive and legally risky DEI policies Walmart threw out in late November.
The timing of the letters couldn’t have been any worse. In the letter led by Illinois Attorney General Kwame Raoul, for example, the Democrat attorneys general write that they “want to make one thing clear: Walmart’s decision to jettison DEI initiatives is not required by law.”
Well, it is now. With a trio of executive orders during his first 48 hours back in the White House, President Trump made clear that he aimed to fulfill the mandate the American electorate gave him last November. Not only did he root out DEI from the federal government, he also ensured that federal contractors and other private businesses abide by federal non-discrimination law rather than the dictates of a failed philosophy that pits people against one another based on protected characteristics like race and sex in any and all hiring decisions.
In issuing his orders, President Trump tasked federal agencies including the U.S. Attorney General with compiling lists of companies, non-profits, and educational institutions receiving federal dollars that were still discriminating under the guise of DEI and related policies.
Newly sworn in Attorney General Pam Bondi has already directed the Department of Justice to act on this order by rooting out illegal DEI practices in the private sector. Andrea Lucas, the new acting chair and longtime commissioner of the Equal Employment Opportunity Commission, has also stated that one of her top priorities will be “rooting out unlawful DEI-motivated race and sex discrimination.”
Of course, DEI posed a serious legal risk to any company prior to Trump’s second run in the Oval Office. That’s a reality that Attorney General Raoul and his fellow signatories explicitly downplay in their letter to McMillon. Mischaracterizing as a “narrow ruling” the 2023 Supreme Court decision striking down race-conscious university admissions policies in Students for Fair Admission, Inc. v. Presidents and Fellows of Harvard College, Attorney General Raoul also sidesteps what the Wall Street Journal has called the “legal assault” on DEI that has taken place since.
Two cases are at the tip of the spear of that “legal assault.” Last June, the Eleventh Circuit struck down race-based criteria for awarding grants to entrepreneurs, and in December, the Fifth Circuit tossed out a discriminatory board diversity rule adopted by Nasdaq at the peak of racial divisions in 2020.
The blue state AGs also issued a new letter that made more detailed recommendations for recruitment, professional development, and integration. But these policies will no doubt be under sustained fire, as AG Bondi has signaled that the only current safe zones are “educational, cultural, or historical observances—such as Black History Month” and Lucas has signaled that many “soft” DEI initiatives like “mentoring, sponsorship, or training programs,” among others, are legally suspect.
And this is to say nothing of DEI’s failures in the marketplace and culture. The data, public sentiment, and case studies of Target, Disney, and Bud Light—which are now shedding these practices—have proven that DEI is a failure. Walmart showed courage and insight to drop DEI. As a global business leader, it’s no surprise that others have followed suit. Yet, just as those well-made business decisions are about to pay off, ideologues are trying to pressure McMillon to choose a doomed and misguided ideology—along with all the risks that come with it.
Business leaders who have ditched DEI are on a clear path to victory. And they need to understand how to stay on that winning course. That’s why a group of faith-based investors and other fiduciaries, like the State Financial Officers Foundation, Bowyer Research, and Alliance Defending Freedom have recently responded with our own letter charting a clear way forward for Walmart and other businesses that want to compete and succeed in an environment that is now rightly prioritizing merit over divisive and discriminatory ideologies.
Activist shareholders and ideologically driven politicians may want Walmart to give away the game at the goal line. But whatever their motivation, these activists are clearly recommending their political preference over sound business judgment. It’s a strategy Walmart has already rejected, and it’s one the superstore will do well to reject going forward.
