Hunton Employment & Labor Perspectives

On Tuesday, February 11, the State of Missouri sued Starbucks for violations of federal and state laws prohibiting race discrimination. In a statement regarding the lawsuit, Attorney General Andrew Bailey said, “[r]acism has no place in Missouri. [The State] fil[ed] suit to halt [a] blatant violation of the Missouri Human Rights Act in its tracks.” This lawsuit comes just weeks after President Trump issued several executive orders targeting Diversity, Equity, and Inclusion (“DEI”) programs. The lawsuit was filed in the United States District Court for the Eastern District of Missouri.

Missouri asserts that the Supreme Court’s holding in Students for Fair Admissions v. Harvard, where university affirmative action programs were deemed to violate anti-discrimination laws, should be applied to “not only to college admissions, but also…to employment decisions.” The complaint alleges that Starbucks’s DEI programs are mere pretexts for unlawful discrimination.

Specifically, it alleges that Starbucks makes hiring and promotion decisions based on its reported numerical targets, which include having Black, Indigenous, or people of color (“BIPOC”) in 40% of all retail jobs and 30% of all corporate positions. The complaint also alleges that Starbucks ties its executive compensation to its achievement of desired diversity goals. Finally, it alleges that Starbucks targeted preferred groups for additional training and job advancement opportunities.

Most of Missouri’s causes of actions arise under Title VII and Mo. Rev. Stat. § 213.055, both of which protect against employment discrimination. Missouri also asserted a cause of action under 42 U.S.C. § 1981, alleging that Starbucks’s discriminatory practices illegally interfere with the rights of white or non-BIPOC individuals from “making and enforc[ing]” employment contracts with Starbucks.

Missouri seeks many forms of relief, including a declaration that Starbucks’s employment practices are unlawful, an injunction preventing Starbucks from engaging in its alleged discriminatory practices, monetary damages, an order instructing Starbucks to change its written policies, and an order mandating that Starbucks issue a statement to all employees regarding the unlawfulness of its practices.

Federal contractors should pay close attention to this case as it starts to unfold. Missouri alleges that Starbucks is a federal contractor, so this case will provide an informative first look as to how courts will treat challenges to DEI programs following President Trump’s anti-DEI executive orders.