Palantir Technology, the data-mining giant that has gradually become one of downtown Palo Alto's most visible tenants, was charged Monday with systematically discriminating against Asian job applicants for three positions, according to a lawsuit filed by the U.S. Department of Labor.
In a suit that could jeopardize Palantir's lucrative federal contracts, the department's Office of Federal Contracts Compliance Programs (OFCCP) alleged that the company has been using since at least January 2010 a hiring process and selection procedures that discriminates against Asian applicants for positions of quality assurance engineer, software engineer and quality assurance engineer intern.
The OFCCP reached its conclusion after a compliance review that it launched in July 2011 at the company's downtown office, at 100 Hamilton Ave., in its complaint. The Department of Labor estimates that Palantir had about $340 million in federal contracts since 2010. This includes software and data-analysis services for the FBI, the U.S. Special Operations Command and the U.S. Department of the Army.
The lawsuit, which was filed with the department's Office of Administrative Law Judges, seeks to nullify Palantir's existing federal contracts and bar it from signing new ones. It would “debar” the company's officers, agents, servants, successors, divisions and subsidiaries from entering into any federal contracts and subcontracts until it demonstrates compliance with Executive Order 11246, which requires government contractors to ensure equal opportunity in employment.
In making its case against Palantir, the OFCCP pointed to its own data about the company's hiring pools and decisions. For the quality assurance (QA) engineer intern position, the pool of applicants had more than 130 qualified applicants, 73 percent of whom were Asian. The company hired 17 non-Asian applicants and only four Asian applicants, according to the suit.
"The likelihood that this result occurred according to chance is approximately one in a billion," the suit states.
For the other two positions, the odds were less astronomic, but still long enough to raise flags. For the quality assurance engineer position, the pool had 730 qualified applicants, about 77 percent of whom were Asian. Palantir hired six non-Asian applicants and one Asian applicant, according to the lawsuit. The odds of that occurring by chance are about one in 741.
For the software engineer position, Palantir received applications from 1,160 qualified applicants, about 85 percent of whom were Asian. The company hired 11 Asian applicants and 14 non-Asian ones. The suit states that the odds of this result occurring by chance are roughly one in 3.4 million.
One problem, according to the complaint, is Palantir's four-phase hiring process, in which Asian applicants were "routinely eliminated during the resume screen and telephone interview phases despite being as qualified as white applicants with respect to the QA Engineer, Software Engineer, and QA Engineer Intern positions." The company's policies for referral of new employees exacerbated this trend, the suit states.
"In addition, the majority of Palantir's hires into these positions came from an employee referral system that disproportionately excluded Asians," the lawsuit states. "The overwhelming preference for referrals, combined with Palantir's failure to ensure equal employment opportunity for all applicants without regard to race, resulted in discriminatory hiring process against Asian applicants."
The suit states that the company had several opportunities to address its hiring deficiencies before enforcement proceedings began. Both the OFCCP and the Office of the Solicitor had attempted to secure Palantir's voluntary compliance through conciliation, the suit states. After efforts at voluntary compliance proved unsuccessful, the OFCCP sent Palantir a notice in October 2015, requesting the company to show cause for why enforcement proceedings should not be initiated.
In addition to canceling current contracts and preventing future ones, the suit seeks to require Palantir to provide "complete relief" to the affected Asian applicants, including "lost compensation, interest, and all other benefits of employment resulting from Palantir's discriminatory failure to hire them, including, but not limited to, retroactive seniority." The OFCCP is also requesting an order requiring the company to hire Asian applicants from the affected class list.
In a statement, OFCCP Director Patricia Shiu said that federal contractors "have an obligation to ensure that their hiring practices and policies are free of all forms of discrimination."
"Our nation’s taxpayers deserve to know that companies employed with public funds are providing equal opportunity for job seekers,"Shiu said.
Palantir disputed the allegations. In a statement, company spokeswoman Lisa Gordon said Palantir is "disappointed that the Department of Labor chose to proceed with an administrative action and firmly deny the allegations."
"Despite repeated efforts to highlight the results of our hiring practices, the Department of Labor relies on a narrow and flawed statistical analysis relating to three job descriptions from 2010 to 2011," Palantir's response states. "We intend to vigorously defend against these allegations."
The company's website emphasizes its commitment to workplace diversity. To access the broadest and fullest set of ideas, the website states, "Our community must attract and encourage people of diverse backgrounds, perspectives, and life experiences."
"We work every day to build a truly diverse workforce, and to foster an environment that is respectful and receptive to new ideas," the company states. "We celebrate difference and diversity -- of background, approach and identity."