Deloitte agrees to pay $21.5 million over US workplace discrimination claims

Deloitte has agreed to pay $21.5 million to settle US government allegations that it discriminated against employees and job applicants on the basis of race or sex while falsely claiming compliance with anti-discrimination requirements attached to federal contracts.

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 US Justice Department said.

Authorities alleged that Deloitte violated the False Claims Act by failing to comply with equal-employment obligations applicable to federal contractors. According to the department, the firm falsely certified its compliance with those requirements from 2017 to the present while pursuing discriminatory employment practices.

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

He added that the Justice Department would pursue contractors accused of using taxpayer money to finance unlawful discrimination.

The government alleged that Deloitte considered employees’ and applicants’ race or sex while making decisions related to recruitment, promotions and staffing. These practices were allegedly intended to advance internal workforce composition targets that were not publicly disclosed.

The company’s business units received monthly reports measuring their progress against demographic targets, according to the Justice Department. Their performance was marked in green, yellow or red, depending on whether they had exceeded, achieved, narrowly missed or fallen substantially short of their goals.

Authorities also alleged that the performance of Deloitte’s partners, principals and managing directors was assessed partly on their contribution towards meeting workforce composition targets.

For two years, the remuneration of about 150 of the firm’s most senior partners, principals and managing directors could be affected when their business units failed to reach the specified demographic goals, the department said.

“Merit drives opportunity and promotion. Not someone’s sex or race,” associate attorney general Stanley E. Woodward Jr said.

The Justice Department alleged that workforce targets were used to influence promotions to senior positions. In one instance, Deloitte allegedly listed candidates by race and sex in a spreadsheet and advised those making promotion decisions to select particular employees to “equitably maintain the current mix”.

The firm also allegedly sought to balance the proportion of underrepresented minority and non-minority employees who were understaffed or waiting for assignments. The race and sex of available employees were identified before their names were sent to staffing managers, according to the government.

Deloitte was further accused of restricting access to certain training, mentoring, educational and leadership-development initiatives on the basis of race or sex. The department named Springboard and Compass among the programmes that allegedly applied such eligibility restrictions.

The case arose from a whistleblower lawsuit brought 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 clarified that the settlement resolved allegations and did not constitute a determination of liability against Deloitte.

The False Claims Act allows the US government to pursue civil penalties and damages against entities accused of knowingly making false claims for federal funds. Its whistleblower provisions permit private parties to file cases on the government’s behalf and receive a portion of any money recovered.

With IANS inputs