Tech Company Sued For Alleged Hiring Bias Against Asians, OFCCP’s Shiu To Step Down

by Constangy, Brooks, Smith & Prophete, LLP

Being part of the “in” crowd with the FBI apparently does not protect you from the Office of Federal Contract Compliance Programs.

To the contrary: It was an FBI contract that subjected a California-based technology company to an OFCCP review that has resulted in an administrative complaint.

Palantir Technologies is a large government contractor with more than $340 million worth of federal contracts with the FBI, the U.S. Special Operations Command, and the U.S. Department of the Army. According to the Wall Street Journal, Palantir assisted the government in finding Osama bin Laden.

But that apparently doesn’t cut any ice with the OFCCP. The Agency filed a complaint last month with the Office of Administrative Law Judges, alleging that Palantir systematically discriminated against Asian job applicants in its hiring process and selection procedures. The lawsuit follows a compliance review conducted by the OFCCP in 2011 and a failed conciliation process. Specifically, the OFCCP alleges that the company used a discriminatory hiring and selection process that resulted in discrimination against Asian applicants for three engineering positions.

bin Laden death.flickrCC.JimLarrison

“Not even THIS will get me out of an OFCCP audit?”

According to the OFCCP, one job classification with seven vacant positions had a pool of 730 qualified applicants, 77 percent of whom were Asian. According to the Complaint, Palantir hired six non-Asians and only one Asian. Another job classification with 25 available positions was identified as having a pool of more than 1160 applicants, 85 percent of whom were Asian. The OFCCP says that Palantir hired 14 non-Asian applicants and 11 Asian applicants for this position. The final job classification had 21 available positions. Out of a pool of 130 applicants, 73 percent of whom were Asian, Palantir hired 17 non-Asian and four Asian applicants. The OFCCP identified the adverse impact in these three positions as exceeding 3 to 6 standard deviations.

The OFCCP also asserts that the company’s practice of relying on employee referrals (presumably from Caucasian incumbents) resulted in disproportionate hiring of Caucasian candidates.

According to Fortune’s Michal Lev-Ram, Palantir contends that the OFCCP’s analysis is faulty and ignores the majority of evidence and data regarding the company’s 44 job titles and overall hiring process. Palantir relies on its own statistical evidence showing that 36 percent of all hires for the company were Asian—a percentage that it contends far exceeds the representation rate of Asians in the job market.

With such big stakes in the game — and with an analytics company on the receiving end of the OFCCP’s ire — it will be an interesting battle to watch. The OFCCP is seeking lost wages and other benefits for the affected class and an order barring Palantir from entering into future government contracts.

Patricia Shiu.flickrCC.Center for American ProgressShiu Departing OFCCP

In other OFCCP news, Patricia Shiu, Director of the OFCCP, has announced that she will leave the Agency effective November 6, two days before Election Day. An interim director is likely to be appointed until “President Clinton” or “President Trump” has the opportunity to make a permanent appointment.

Image Credits: From flickr, Creative Commons license: Newspapers announcing bin Laden’s death by Jim Larrison, Patricia Shiu by Center for American Progress.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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