The resolution resolves allegations involving race and sex-based employment practices.
Deloitte has agreed to pay $21.5 million to settle allegations that the company broke federal rules tied to employment discrimination while working under government contracts, according to the U.S. Department of Justice. The employment settlement involves claims that Deloitte considered race and sex in hiring, promotions, staffing, and other workplace decisions while also telling the federal government that it was following equal employment rules. The case was brought under the False Claims Act, a federal law that can be used when companies are accused of making false statements to obtain government money or benefits. The employment settlement with the Department of Justice (DOJ) does not mean Deloitte was found legally responsible for the alleged conduct, and the government shared there has been no finding of liability.
Federal contractors are required to agree that employment decisions will be made without discriminating based on race or sex. Companies also must certify that they will follow those rules as part of their federal contracts when hiring. The DOJ said Deloitte made those certifications while collecting and considering race and sex information in several parts of its business. According to the government, Deloitte had workforce goals based on these factors and tracked progress toward those goals. Business units received regular reports showing how closely they were meeting the targets and some senior Deloitte leaders had part of their pay tied to progress during a two-year period mentioned in the lawsuit.
The allegations also involved promotions. The DOJ said Deloitte set race and sex targets for groups of employees being considered for senior positions. In one example described by the government, employee names were marked by race and sex when candidates were reviewed. Those involved in choosing candidates were allegedly encouraged to consider certain employees in order to keep the existing demographic balance.
Another part of the case involved staffing for federal contracts, with the government alleging Deloitte tracked employees by these identifiable traits when deciding who should be assigned to projects. Staffing managers were given information about employees who were waiting for assignments, with suggestions that certain employees be placed on projects based partly on whether those assignments would help meet demographic targets. Additionally, the DOJ said some programs, including Springboard and Compass, had eligibility rules based on race or sex. According to the allegations, those programs offered mentoring, networking, leadership training, education, or other career support to selected groups of employees.
The employment settlement includes a whistleblower case brought by the American Alliance for Equal Rights. Under the False Claims Act, private parties can bring certain cases on behalf of the federal government and may receive part of money recovered through a settlement. The organization is set to receive $4.3 million from the agreement. The DOJ said the Deloitte case was handled by several parts of the department along with the U.S. Attorney’s Office for the Northern District of Texas. The government has also been increasing enforcement of False Claims Act cases involving federal programs and contracts. The $21.5 million payment resolves the allegations against Deloitte without a court ruling while allowing the agency to continue its efforts to enforce the rules that apply to all companies receiving taxpayer-funded contracts.
Sources:
Deloitte agrees to pay $21.5 million in US hiring case: What went wrong?
Deloitte Agrees to Pay $21.5M to Resolve Alleged Employment Discrimination Violations
