NEW YORK — Walmart has made significant changes to its diversity policies, indicating a notable shift among U.S. corporations reevaluating the potential legal and political repercussions tied to initiatives supporting historically underrepresented groups in business.
These policy adjustments by the retail giant come on the heels of a series of legal wins for conservative organizations challenging corporate and federal efforts designed to uplift minority and women-owned businesses and workers. The scrutiny surrounding these initiatives intensified with the election of former President Donald Trump, whose administration is expected to prioritize the dismantlement of diversity, equity, and inclusion (DEI) programs. Trump’s former adviser, Stephen Miller, who heads a group that has aggressively contested corporate DEI policies, will play a key role in shaping these efforts.
“There is a significant reassessment of risk concerning programs that may be viewed as reverse discrimination,” noted Allan Schweyer, a principal researcher at the Human Capital Center with the Conference Board. He added, “This represents a significant domino falling in this scenario.”
Walmart’s revisions include the discontinuation of priority treatment for suppliers owned by women or minorities. Additionally, the company has opted not to renew a commitment made in 2020 for a racial equity center established after the police killing of George Floyd, and it withdrew from a notable gay rights index.
The impetus for these corporate changes appears to be a reassessment of legal risk, especially following the U.S. Supreme Court’s ruling in June 2023 that prohibited affirmative action in college admissions. Conservative groups have since capitalized on this ruling, securing court victories against various diversity initiatives, particularly those that allocate contracts to minority or women-owned enterprises.
Recently, the Wisconsin Institute for Law & Liberty achieved success in a lawsuit against the U.S. Department of Transportation regarding a program that prioritized minority-owned businesses in its contracting process. Dan Lennington, a deputy counsel at the institute, pointed out that companies are increasingly perceiving significant legal risks in maintaining ongoing DEI strategies. His organization has identified over 60 federal programs they view as discriminatory.
“There is now a legal environment across the three branches of the federal government—the Supreme Court, Congress, and the Presidency—moving toward the principle of equal treatment for individuals rather than grouping people based on race,” Lennington stated. The Trump administration is also anticipated to actively target DEI initiatives through executive measures impacting private firms, especially federal contractors.
“The implications of the election for DEI policies are enormous and should not be underestimated,” said Jason Schwartz, co-chair of the Labor & Employment Practice Group at a prominent law firm. With Miller’s return to the White House, the disbandment of DEI initiatives is expected to be a priority, Schwartz remarked. He further emphasized the challenge companies face in maintaining an inclusive workplace while navigating the diverse perspectives of their employees and customer base. “It’s an exceptionally tough balance to strike,” he added.
A recent Pew Research Center survey revealed mixed opinions about DEI policies among workers. Although a majority still support these initiatives, the proportion of employees viewing workplace diversity positively declined from 56% in February 2023 to 52% by November of the same year. Rachel Minkin, a research associate at Pew, described this shift as small yet telling within a brief timeframe.
While some companies may scale back their DEI efforts, this is unlikely to be a blanket trend across the board, according to David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at New York University. “Numerous companies are continuing their commitment to DEI, albeit quietly, focusing on their core principles without seeking the spotlight,” he stated.
Glasgow urged organizations to adhere to their foundational values, especially since public opinions on such topics can change rapidly. “If companies fluctuate their commitments based on political climates, they risk appearing inconsistent and weak,” he warned. DEI programs are essential as they help safeguard companies against traditional discrimination lawsuits. “Companies should carefully consider the potential risks in all directions regarding DEI,” he added.
Walmart has made it clear that it will no longer factor race or gender into its supplier contract decisions. Last year, Walmart reported expenditures exceeding $13 billion on goods and services supplied by minority, women, or veteran-owned businesses. There remains uncertainty about how these changes will impact these supplier relationships moving forward. Response from partner organizations has been cautious, with the Women’s Business Enterprise National Council expressing the need to assess the implications of Walmart’s announcement.
Pamela Prince-Eason, the organization’s president and CEO, expressed hope that Walmart’s commitment to its diverse customer base might continue to encourage contracts with women-owned suppliers, despite the absence of explicit goals. She remarked, “I believe Walmart will maintain one of the most inclusive supply chains in the world. Understanding their varied customer base, which includes many women, will continue driving their business decisions.”
This decision from Walmart arises after discussions with conservative commentator Robby Starbuck, who has publicly criticized corporate DEI policies on social media. Following pressure from such advocates, other companies like Ford, Harley-Davidson, Lowe’s, and Tractor Supply have similarly reassessed their DEI initiatives.
Additionally, Walmart has confirmed it will enhance oversight of its third-party marketplace to avoid showcasing products with sexual and transgender themes aimed at minors. The retailer has also withdrawn from participating in the Human Rights Campaign’s annual benchmarking index assessing LGBTQ+ workplace inclusivity.
RaShawn “Shawnie” Hawkins, senior director at the HRC Foundation’s Workplace Equality Program, criticized companies that back away from their commitments to workplace inclusion, stating such actions betray their responsibilities to employees, customers, and stakeholders. He underscored the significant purchasing power of LGBTQ consumers and noted that participation in the index is set to reach historic levels, with over 1,400 companies expected to take part in 2025.