Deloitte pays US$21.5m to settle claims it pursued unlawful DEI practices

Deloitte has agreed to pay the US government US$21.5 million to resolve allegations it failed to comply with anti-discrimination requirements in its federal contracts and discriminating against employees and applicants on the basis of their race or sex.

"Most federal contracts contain a provision that requires contractors to provide equal opportunity to employees and applicants for employment," US Department of Justice said.

As a condition to being a federal contractor, companies must certify to not discriminate against an employee or applicant for employment because of race or sex and must further certify to take steps to ensure that applicants are employed, and employees are treated during employment, "without regard to" race or sex.

The settlement resolves allegations from 2017 to the present of Deloitte falsely certified compliance with these conditions, while engaging in discriminatory race and sex-based employment practices.

"Merit drives opportunity and promotion. Not someone's sex or race. Today's settlement is yet another example of this Department's commitment to eliminating woke, unconstitutional practices from American workplaces," US associate attorney general Stanley Woodward Jr said.

The United States alleged Deloitte 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.

"Business units within Deloitte received monthly summaries tracking the demographic goals within the unit, where representation or advancement toward the goal was highlighted in green, yellow, or red depending on whether the goal was exceeded, met or slightly missed, or significantly below the goal," US Department of Justice said.

"In addition, the United States alleged Deloitte's partners, principals and managing directors (PPMDs) were evaluated, in part, based on their contributions to helping Deloitte achieve its workforce composition goals, while, for a two-year period, approximately 150 of Deloitte's most senior PPMDs compensation could be impacted if their business units did not meet demographic goals set by Deloitte."

The United States alleged Deloitte offered certain training, mentoring, leadership development programs, educational opportunities or resources, and/or similar opportunities only to certain employees, with eligibility limited on the basis of race or sex.

"Government contractors cannot reward or penalize employees based on race or sex - and labelling 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."

Deloitte denies that it engaged in the covered conduct and denies the allegations in the Civil Action.

Earlier in the year, US president Donald Trump signed an executive order asking federal contractors ‌and their subcontractors to eliminate diversity, equity and inclusion practices.