Corporate giants such as Walmart (WMT) and Amazon (AMZN) could be in the firing line of President Trump’s ‘workforce enforcer’ next year because changes to their diversity and equity programs have not been tough enough.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
Federal Inquiries Underway
In an interview with Reuters, Andrea Lucas, the Chair of the Equal Employment Opportunity Commission, a Federal Agency, said companies that factor race, sex or other protected characteristics into employment decisions could face enforcement actions or litigation. She has been dubbed President Trump’s anti-discrimination workforce enforcer.
She said federal inquiries into corporate diversity programs are underway and warned that diversity initiatives tied to hiring, promotion or marketing may be under the spotlight.
“If you have a DEI program or any employee program that involves taking an action in whole or in part motivated by race or sex or any other protected characteristic, that’s unlawful,” Lucas said.
After his arrival in office earlier this year, President Trump derided Diversity, Equity and Inclusion programs as being both “illegal and immoral.” In one social media post he blasted: “DEI was a hoax that has been very bad for our country. DEI is gone!”
It led to an executive order, signed on January 20, which banned DEI initiatives across government agencies and encouraged the private sector to follow suit.
Did Changes Go Far Enough?
Major blue-chip names such as Meta (META), Amazon (AMZN) and Coca-Cola (KO) made changes to their DEI programs. Walmart said it would stop using DEI terms in official documents and also stop sharing the data on its LGBTQ policies with the Human Rights Campaign.
It also vowed to end its $100 million funded non-profit organization, Center for Racial Equity, that offers assistance to suppliers owned by minorities, women, veterans, or LGBTQ communities. Additionally, it would stop third-party sellers from marketing some LGBTQ-focused items on its site and transgender items, such as chest fasteners, aimed at minors.
Lucas did not say which companies are being investigated, but it is likely that even those firms which have made changes will be scrutinized. Her agency will be asking whether those initiatives have met its threshold of broad and swift action.
“We’re talking about potentially thousands of people being involved or like a very blatant racial or sex-discrimination-related restricted programming,” Lucas said. “Either way, we’re looking for strategic impact.”
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 25 Buy ratings. Its highest price target is $136. WMT stock’s consensus price target is $123.21, implying a 7.30% upside.
