Deloitte pays $21.5mn over US bias claims

Deloitte has agreed to pay the US government $21.5 million to resolve allegations that it discriminated against employees and job applicants based on race or $ex while falsely certifying compliance with anti-discrimination provisions in federal contracts, the Justice Department said.

The civil settlement covers Deloitte LLP, Deloitte Consulting LLP, Deloitte & Touche LLP, Deloitte Financial Advisory Services LLP and Deloitte Transactions and Business Analytics LLP.

The Justice Department alleged that Deloitte violated the False Claims Act by failing to comply with equal-employment requirements attached to its federal contracts.

The settlement resolved allegations that Deloitte falsely certified compliance with those conditions from 2017 to the present while engaging in discriminatory employment practices, according to the Department of Justice.

“Government contractors cannot reward or penalize employees based on race or $ex — and labeling the practice DEI does not make it lawful,” Attorney General Todd Blanche said.

“The Justice Department will aggressively pursue government contractors that have used taxpayer dollars to fund unlawful discrimination,” he said.

US authorities alleged that Deloitte considered race or $ex when making hiring, promotion and staffing decisions to advance internal workforce composition goals that were not publicly disclosed.

Business units received monthly summaries tracking progress towards the demographic goals, according to the department. Results were highlighted in green, yellow or red depending on whether a unit had exceeded, met, narrowly missed or fallen significantly below its target.

The government also alleged that Deloitte’s partners, principals and managing directors were assessed partly on their contributions towards achieving the company’s workforce composition goals.

For two years, the compensation of approximately 150 of Deloitte’s most senior partners, principals and managing directors could be affected if their business units failed to meet demographic goals, the department said.

“Merit drives opportunity and promotion. Not someone’s $ex or race,” Associate Attorney General Stanley E. Woodward Jr said.

The government alleged that the goals were also designed to influence decisions on promotions to senior positions.

In one instance, Deloitte allegedly identified candidates by race and $ex in a spreadsheet and suggested that officials selecting candidates promote particular employees to “equitably maintain the current mix.”

The department further alleged that Deloitte sought to balance the proportion of underrepresented minority and non-minority employees who were understaffed or “on the bench.”

Employees available for assignments were identified by race and $ex, and their names were provided to staffing managers, according to the government.

Deloitte also allegedly restricted access to some training, mentoring, leadership-development and educational programmes based on race or $ex. The Justice Department identified Springboard and Compass as programmes whose eligibility was allegedly limited using those characteristics.

The settlement arose from a whistleblower lawsuit filed by the American Alliance for Equal Rights under the False Claims Act. The organisation will receive $4.3 million from the government’s recovery.

The Justice Department stressed that the settlement resolved allegations only and that there had been no determination of liability against Deloitte.

The False Claims Act allows the US government to seek civil penalties and damages from individuals or companies accused of knowingly submitting false claims for federal money. Its whistleblower provisions allow private parties to sue on behalf of the government and receive part of any recovery.