The U.S. Department of Justice (DOJ) announced that it has reached a settlement with Deloitte, with the global professional services firm agreeing to pay $21.5 million to settle allegations that it discriminated against employees and applicants on the basis of their race or sex through the use of DEI-related goals in its hiring, promotions and staffing decisions.
The allegations formed part of the DOJ’s Civil Rights Fraud Initiative, launched by the department last year to crack down on the use of DEI policies by federal contractors and other recipients of federal funds, such as universities, through the False Claims Act, which requires federal contractors to certify compliance with civil rights laws.
The pace of anti-DEI activity by U.S. politicians has accelerated since the election of President Trump, starting with an Executive Order signed by Trump after taking office eliminating DEI preferencing in federal contracting, and requiring contractors to affirm that they “will not engage in illegal discrimination, including illegal DEI.” In the past few months, the DOJ announced a $30 million DEI-related settlement with PayPal, while federal agency The Equal Employment Opportunity Commission (EEOC) has launched an investigation into Nike, based on allegations that the company discriminated against white workers through its DEI programs, and initiated a lawsuit against the New York Times alleging that the company violated laws prohibiting race- and sex-based discrimination by passing over a white male employee for a promotion due to its DEI policies.
U.S. Associate Attorney General Stanley E. Woodward Jr., said:
“Today’s settlement is yet another example of this Department’s commitment to eliminating woke, unconstitutional practices from American workplaces.”
In its new settlement announcement, the DOJ listed a series of allegations against Deloitte, claiming that the firm took race or sex into account when making hiring, promotion, and staffing decisions to achieve progress toward non-public race and sex-based workforce composition goals.
Among the allegations, the DOJ said that business units within the company received monthly summaries in which advancement towards demographic goals was highlighted in green, yellow, or red depending on progress towards the goal, and that Deloitte’s Partners, Principals and Managing Directors (PPMDs) were evaluated in part based on their contributions to helping achieve workforce composition goals.
The U.S. also alleged that Deloitte’s demographic goals were intended to impact the firm’s promotion decisions, with business units assigned race and sex-based goals for the make up of their yearly PPMD classes, that the firm set goals pertaining to the demographics of employees staffed to federal contracts, and that it offered certain training, mentoring, leadership development programs, educational opportunities or resources or other opportunities to certain employees, with eligibility limited on the basis of race or sex.
U.S. Attorney General Todd Blanche, said:
“Government contractors cannot reward or penalize employees based on race or sex — and labeling the practice DEI does not make it lawful. The Justice Department will aggressively pursue government contractors that have used taxpayer dollars to fund unlawful discrimination.”
