Target Faces Lawsuit Over Pride Marketing Campaign

Target Corporation failed to overturn a lawsuit that accused the retail giant of deceiving shareholders and failing to disclose the risk of consumer backlash to its “Pride Month” marketing campaign last year.

On December 4, Reuters reported that US District Judge John Badalamenti, based in Fort Myers, Florida, ruled that the plaintiffs presented sufficient evidence to proceed with their claims that Target failed to properly address the social and political risks associated with the campaign, which led to billions of financial losses.

The lawsuit, filed by investor Brian Craig through America First Legal in August 2023, alleged that Target’s Board of Directors solely focused on activist groups’ calls for diversity, equity and inclusion (DEI) measures and overlooked the potential negative responses to the Pride campaign in May 2023 despite assurances to shareholders that it was monitoring the political and social issues and risks that could arise.

Additionally, the lawsuit alleged that Target embraced a radical transgender agenda which targeted children and families through the corporation’s infamous 2023 Pride campaign.

“However, management only cared when leftist “stakeholders” cared about these business decisions,” America First Legal claimed.

Target did not immediately respond to requests for comment from Reuters on Wednesday. However, it earlier argued that it had warned investors about a potential DEI backlash, and that the complaint was based merely on Craig’s disagreement with the company’s business decisions.

It attempted to move the case from Florida, where the lawsuit was filed, to Minnesota, where Target is headquartered.

America First Legal, a conservative nonprofit led by Trump former adviser Stephen Miller, hailed the court’s decision as a significant warning to corporate boards and management about their duty to disclose the market risks created by social and political initiatives.

“Our federal securities laws mandate fair and honest disclosure of the market risk created by management when it uses shareholder resources, including consumer goodwill, to advance idiosyncratic and extreme social or political preferences. The risk of ESG mandates and DEI initiatives, such as Target’s “Pride Month” that targeted young children, cannot be whitewashed with boilerplate language or ignored,” said America First Legal Senior Vice President Reed D. Rubinstein.

It said that the risk of DEI programs and environmental, social, and governance (ESG) initiatives “cannot be whitewashed with boilerplate language or ignored.”

In response to mounting criticism, Target pulled some LGBTQ-themed merchandise linked to Pride Month last year, citing a rise in confrontations between shoppers and employees, as well as incidents where products were thrown on the floor.