By Daniel Wiessner
(Reuters) - Activision Blizzard Inc (NASDAQ:ATVI) and Kellogg (NYSE:K) Co have joined a growing list of major U.S. companies to face claims from a group founded by former Trump administration officials that efforts to diversify their workforces amount to illegal discrimination.
America First Legal this week urged the U.S. Equal Employment Opportunity Commission (EEOC) to investigate Activision's alleged use of gender and racial preferences in hiring and internship programs, after lodging a similar complaint against Kellogg last week.
America First has filed complaints with the EEOC involving Starbucks Corp (NASDAQ:SBUX), McDonald's Corp (NYSE:MCD), Morgan Stanley, Anheuser-Busch Companies LLC, and Hershey Co (NYSE:HSY), among other companies designated on its website as "woke corporations."
The group is headed by Stephen Miller, who was a senior adviser to Republican former President Donald Trump known for his hardline stance on immigration. Ex-Trump chief of staff Mark Meadows and former Acting U.S. Attorney General Matthew Whitaker are board members.
The complaints come as many experts expect an uptick in challenges to corporate diversity programs following a U.S. Supreme Court ruling in June that prohibited race-conscious college admissions policies.
The growing scrutiny underscores competing pressures that companies face to implement diversity initiatives but also to rein them in amid conservative backlash, according to Rick Rossein, a professor at the City University of New York School of Law. Legal complaints like the ones filed by America First could drive employers to be more cautious, he said.
“There certainly is a deep psychological effect that is putting the brakes on the forward movement of diversity in the workplace,” Rossein said.
America First's complaints cite a range of hiring, promotion and contracting programs. They include a Starbucks initiative designed to boost diversity in senior leadership and McDonald's policy of evaluating executives based in part on their efforts to diversify the company's workforce.
America First has also filed lawsuits accusing Target Corp (NYSE:TGT) and Progressive Insurance of breaching their duties to shareholders by adopting diversity programs and progressive marketing campaigns, for instance celebrating LGBTQ Pride Month.
Kellogg said in a statement it complies with employment laws and has anti-discrimination policies in place. Hershey said in a statement it does not tolerate discrimination and that "we believe our business is stronger when we are inclusive."
Activision and Morgan Stanley declined to comment. The other companies did not respond to requests for comment.
It is difficult to say whether the EEOC, which enforces federal laws banning workplace discrimination and currently has a Democratic majority, will take up America First's complaints.
The agency's investigations are typically triggered by complaints from workers. But its five commissioners, who are appointed by the president, can bring their own complaints that can lead to probes and lawsuits.
So-called "commissioner's charges" are relatively rare, with 29 filed last year, up from only three in each of the previous two years.
Commissioner Andrea Lucas, a Trump appointee, filed a dozen charges last year, more than any of her colleagues. Lucas has said poorly-planned diversity programs can be illegal, and that the Supreme Court ruling on affirmative action should be a wake-up call to employers that they cannot include race or gender preferences in workplace policies.
Lucas declined to comment on whether she is considering filing charges against any company relating to diversity, equity and inclusion (DEI) policies. EEOC commissioners are legally barred from confirming the existence of a specific charge or investigation.
Gene Hamilton, America First's vice president and general counsel and a former Trump administration lawyer, said in a statement that it was patently illegal for companies to "obsess" over the demographics of their workforces.
"Major corporations ... apparently do not care as much about the quality of the products that they make, but the race and sex of the employees who make their products," he said.