American First Legal (AFL) has taken a decisive step by issuing a demand letter to Disney's CEO, Bob Iger, as well as the Board of Directors and management team.
The missive accuses the company of breaching fiduciary duties and violating federal civil rights laws, specifically in relation to its diversity, equity, and inclusion (DEI) initiatives. AFL, a legal advocacy group led by former Trump advisor Stephen Miller, contends that Disney's DEI programs have adversely impacted the company's value.
In the letter, AFL asserts that Disney's implementation of DEI programs is inherently unlawful. The Board and management are accused of advancing a politically motivated agenda that undermines the company's reputation and goodwill.
The letter states, "The evidence is that Disneys Board and management team are sacrificing the Companys reputation and goodwill to serve a highly idiosyncratic and controversial political agenda that is offensive to the vast majority of the Companys core customers." It further alleges that this conduct lacks a rational business purpose and is not in the best interest of the shareholders.
This legal challenge follows earlier revelations by American First Legal in February concerning Disney's alleged use of race and sex quotas in its hiring practices. The group had filed a federal civil rights complaint with the US Equal Employment Opportunity Commission, citing internal memos and public documents as evidence of discriminatory practices at Disney.
The complaint specifically points to Disney's imposition of hiring quotas, mandating that at least half of a hiring group be from an "unrepresented group" for various roles, both in front of and behind the camera. This policy reportedly extends to characters on screen, actors, and the entire crew involved in Disney General Entertainment productions.
AFL argues that the consideration of race, ethnicity, and sex in hiring, training, compensation, and promotion is illegal and violates federal civil rights laws. The group asserts that Disney's intention to implement such policies demonstrates a blatant disregard for these laws.
Moreover, AFL contends that these actions have significantly impacted Disney's market capitalization.
In February 2021, Disney's market cap stood at around $341 billion, whereas today it hovers at approximately $207 billion, marking a nearly 40 percent decline. AFL argues that Disney failed to adequately inform shareholders about the financial risks associated with integrating a radical, woke culture into its content.
The legal group criticized Disney for promoting content that they describe as radical and divisive, while cautioning about potentially harmful content in non-controversial material.
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