Contractor Settles Claim of Discrimination Against Asian Applicants for $1.66M

Likelihood of some adverse impact being by chance was one in a billion, according to the OFCCP

Allen Smith, J.D. By Allen Smith, J.D. April 28, 2017
Contractor Settles Claim of Discrimination Against Asian Applicants for $1.66M

​A workforce well-represented by Asian employees still might unlawfully discriminate in discrete positions if statistics indicate a selection rate for those jobs adversely impacts Asian applicants, suggests a settlement between a technology company and the federal government.

Palantir Technologies, a Palo Alto, Calif., firm that helps the government fight terrorism and stop human trafficking, discriminated against Asian applicants in the hiring and selection process for engineering positions, according to the Office of Federal Contract Compliance Programs (OFCCP). Last September, the OFCCP sued Palantir, which as a federal contractor is prohibited by Executive Order 11246 from discriminating in employment on the basis of race, before entering a consent decree that was announced April 25. Palantir agreed to a $1.66 million settlement that will result in the offer of jobs to eight eligible class members.

[SHRM members-only toolkit: Managing Federal Contractor Affirmative Action Programs]

Alleged Discrimination in Engineering Positions

For its front-end quality assurance engineer position, from a pool of more than 730 qualified applicants—approximately 77 percent of whom were Asian—Palantir hired six non-Asian applicants and only one Asian. The likelihood that this result occurred by chance was one in 741, according to the OFCCP in its complaint.

For a software engineer position, from a pool of more than 1,160 qualified applicants—approximately 85 percent of whom were Asian—Palantir hired 14 non-Asian applicants and 11 Asian applicants. The OFCCP said that the likelihood of this occurring by chance was one in 3.4 million.

For the quality assurance engineer intern position, from a pool of more than 130 qualified applicants—approximately 73 percent of whom were Asian—Palantir hired 17 non-Asian applicants and only four Asian applicants. The OFCCP said the likelihood of this occurring by chance was one in a billion.

The OFCCP found that Palantir used a four-phase hiring process in which Asian applicants were routinely eliminated during the resume screen and telephone interview phases despite being as qualified as other applicants. A preference for referrals also resulted in the disproportionate exclusion of Asians, the OFCCP said.

Company Employed Many Asians

Palantir, which admitted no wrongdoing, alleged in its answer to the complaint that 37 percent of its product engineering team and 25 percent of its workforce are of Asian descent. It claimed that the OFCCP's complaint hinged on "a flawed and illogical statistical analysis of data covering an 18-month period that ended more than five years ago" on June 30, 2011. The review addressed only three of the 44 job titles for which the company hired employees.

"OFCCP's complaint suggests that Palantir should have hired a workforce that matched the racial composition of the group of individuals whose resumes Palantir received, without regard to candidate qualifications," the company said in its answer to the complaint. "That makes no sense and, in fact, suggests that Palantir should have used an illegal quota system."

Three of the four members of Palantir's senior leadership identify as minorities, including two who identify as Asian, the company said. "Palantir's head of technical operations, IT manager, and more than a dozen of its team or group leads also are of Asian descent," it stated. "In fact, over 50 percent of the Palantir managers who oversaw the allegedly discriminatory hiring process are, themselves, Asian."

Statistics Matter

But some discrimination becomes apparent only after complex statistical analysis, noted Daniel Schlein, an attorney in New York City.

Palantir's recruitment practices came under scrutiny after the OFCCP randomly selected it for review and examined hiring data, he noted. "The OFCCP relied on statistical data that seemed to show that Palantir used an employee referral system that significantly disadvantaged Asian applicants even though most of the applicants were Asians," he said.

"Adverse impact calculations are concerned with how the percentage of hires in the relevant category compares with the percentage of those in the applicant pool," said Cheryl Behymer, an attorney with Fisher Phillips in Columbia, S.C. "If 100 Asians apply and three are hired but only three whites apply and all three are hired, the number of hires in the two categories are the same but the whites were hired at a rate of 100 percent while Asian hires were only at 3 percent," she noted. "However, even that may not result in statistically significant adverse impact as the analysis must also account for the hiring in other [job] categories as well."

Employers that must collect voluntary self-identification data for applicants should review the adverse impact of the applicant and hiring activity on at least an annual basis, which is required for federal contractors, she said. "If they identify statistically significant adverse impact, they should examine the various components of the applicant/hiring procedure to see if they can identify where the issue arose and then address those issues," she recommended. 

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