Under pressure from the ACR Project and the shareholders we represent, Lowe’s Companies, Inc. has replaced a multi-year promotion that discriminated against small-businesses based on the race and sex of their owners with a parallel program treating all businesses equally. The move follows on the heels of the ACR Project’s parallel success in convincing Coca-Cola to abandon its discriminatory outside counsel policy.
In both 2020 and 2021, Lowe’s widely publicized the “Making It … with Lowe’s” promotion, an in-house “shark-tank” like contest. Small businesses submitted new products, with Lowe’s rewarding winners with priceless national publicity, inclusion among Lowe’s vendors, and sales nationwide through its website and stores. Expressly, Lowe’s excluded submissions from any business 51% owned by wholly-abled non-veterans who were not “Minority, Women … or LGBTQ.”
When Lowe’s announced last summer that “Making It … with Lowe’s [was] back,” we wrote the company, warning both that the program’s racial discrimination in contracting clearly violated the Civil Rights Act of 1866 (as amended and currently codified at 42 U.S.C. § 1981) and that its discrimination based on race, ethnicity, sex, and gender violated a host of state-level anti-discrimination laws. Subsequently, on behalf of a set of Lowe’s shareholders, we wrote again (along with our North Carolina co-counsel at Bell|Davis|Pitt), reiterating this analysis and demanding that Lowe’s officers and directors “immediately halt the [Making It … with Lowe’s] promotion, … restart the promotion through a new, non-discriminatory application process open to all entrepreneurs without penalty for the race, sex, and gender of applicants, and adopt and announce a timeline for that new, non-discriminatory application process.”
The 2021 installment of Making It … with Lowe’s concluded before the statutory period for a response to the shareholders’ demand ran. Accordingly, even after Lowe’s Associate General Counsel Bill Ellison wrote back that “the [Lowe’s] Board has concluded that it would not be in the best interests of the company and its shareholders to pursue any claims or take any action with respect to the issues raised in the Demand Letter,” the future of Making it … with Lowe’s remained unclear. After all, it’s one thing to deny wrongdoing; it’s another to follow through, by continuing to do the same things. With the prior installment having run its course, the shareholders had to watch and wait to find out if there would be a third round before taking action.
The company’s subsequent actions silently concede that the shareholders were right. On July 13, 2022, the anniversary of last year’s launch of the Making It … with Lowe’s contest came and went in silence. Then, on July 26, 2022, Lowe’s announced the launch of “Into the Blue: Lowe’s Product Pitch Event.” Just like Making It … with Lowe’s, Into the Blue allows suppliers to pitch their products directly to Lowe’s leadership (although, this time, they are required to do so in person). Just like Making It … with Lowe’s, Into the Blue’s prize is admission to Lowe’s vendor list, expressly intended to help “participating business owners as they work to scale their operations.” But, unlike Making It … with Lowe’s, Into the Blue’s terms and conditions allow entry by all prospective suppliers, without discriminating based on race, ethnicity, sex, and gender in violation of American civil rights laws.
Lowe’s failure to abide by American law over the past two years allowed the Making It … with Lowe’s program to threaten the company and its investors with potential disaster. Lowe’s officers and directors’ refusal to confront the problem in real-time last fall, when shareholders demanded they do so, expanded that threat. Given that obstinance, it’s particularly encouraging that, whatever their posturing, they have learned from their mistakes. We’re glad to see their belated rejection of overt discrimination, and hope that they do not use the live pitches of Into the Blue to discretely pursue the same race and sex discrimination they’ve conceded they cannot put in writing.