Government-Contracted Tech Firm Sued for Racial Discrimination

Government-Contracted Tech Firm Sued for Racial Discrimination

The U.S. Department of Labor has filed a lawsuit against software company Palantir Technologies, alleging the company “systematically” discriminated against Asian job applicants.

According to the complaint filed on September 21st, since at least January 2010 to present, Palantir utilized hiring processes, selection procedures and employee referral systems that “discriminate against Asian applicants on the basis of their race.”

Palantir Technologies is a U.S. government contractor. They provide software and data analysis services under federal contract to the Federal Bureau of Investigation (FBI), the U.S. Special Operations Command and the U.S. Army. According to the lawsuit, these contracts are valued at $340 million.

The lawsuit alleges Palantir Technologies is in violation of Executive Order 11246. This Order, among other agreements, states that federal contractors “will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin.”

In a Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) compliance review of the company, they found Palantir violated Executive Order 11246 by:

  • Using a hiring process and selection procedures that discriminated against Asian applicants for software engineering positions on the basis of their race.
  • Maintaining a hiring process in which Asian applicants were routinely eliminated in the resume screening and telephone interview phases, despite being as qualified as white applicants.
  • Hiring a majority of applicants from a discriminatory employee referral system. The overwhelming preference for referrals, combined with the contractor’s failure to ensure equal employment opportunity for all applicants without regard to race, resulted in discrimination against Asian applicants.

In October 2015, the OFCCP sent Palantir a Notice to Show Cause why they should not initiate enforcement proceedings against the company based on their findings. The OFCCP also attempted to secure Palantir’s voluntary compliance through conciliation, which was unsuccessful.

Among other actions, the OFCCP has requested Palantir Technologies be stripped of all their government contracts, and for the company and its subsidiaries to be barred from entering into future contracts with the federal government until it has taken efforts to remedy its non-compliance. In addition, the OFCCP is seeking an order for Palantir to provide relief to the affected class of Asian applicants including lost compensation, interest and all other benefits of employment including retroactive seniority.

 

What Does This Mean For Companies?

This case sets a strong precedent for the enforcement of government contract compliance requirements.

Rather than issue fines, the OFCCP is looking to strip Palantir Technologies of their government contracts. This is a clear message indicating government contracts are being monitored, and as such, companies are expected to meet their compliance requirements or face similar enforcement actions.

Federal contractors have many compliance requirements which they agree to upon accepting their contracts. Executive Order 11246 is implemented by the Federal Acquisition Regulation (FAR) clause on Equal Employment Opportunity. This is one of the many clauses within the FAR system companies are required to comply with, including the final rule on Combating Trafficking in Persons.

For more information on this case, and your company’s requirements as a federal government contractor, contact our regulatory experts at info@assentcompliance.com.


 

Read more about the FAR rule on Combating Trafficking in Persons in our eBook, Anti-Human Trafficking: Everything Your Company Needs to Know.

To keep up to date with human rights regulations and requirements, click here to visit our blog or here to view our upcoming webinars and events.

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