In a rare public display of the alleged discrimination against female and minority tech workers, the Department of Labor began to make its case in a hearing Thursday that Oracle underpaid women, Asians, and black employees working in certain roles at its Silicon Valley headquarters by $401 million over the course of four years, one of the largest federal antidiscrimination cases to go before a judge.
The Labor Department is set to call 21 current and former Oracle employees as witnesses to bring to life the statistical claims that Oracle violated equal opportunity statutes governing federal contractors. The agency alleges Oracle, the database management company founded by billionaire Larry Ellison, paid some women as much as 20 percent less than their male peers, or $37,000, in 2016. The lawsuit was filed by the department's Office of Federal Contract Compliance Programs, which audits companies with government contracts worth more than $100 million a year.
The hearing in San Francisco has broad significance for the tech industry because the allegations against Oracle are similar to the department’s claims that other tech giants, including Google and Palantir, exercised systemic discrimination against minority and female employees in hiring, pay, or promotion.
Palantir, a data-mining company, settled the claims in 2017, while the department's investigation into Google has been mired in a dispute over access to compensation data. That makes the Oracle hearing a rare airing of testimony from the employees who faced alleged discrimination, as well as compensation data at a major tech company. Oracle and Google are also facing private pay, promotion, or hiring discrimination lawsuits filed by current and former employees.
In a statement, Oracle spokesperson Deborah Hellinger said: “Oracle’s diversity is the foundation of our strength and the key to our innovation. We remain committed to an inclusive workforce where everyone is valued and recognized for their contributions.” In late November, Oracle filed a lawsuit alleging that the Labor Department’s enforcement action was unlawful.
Google did not respond to a request for comment. Palantir declined to comment.
The Labor Department said in a statement that federal contractors must comply with antidiscrimination laws and regulations.
Some tech companies initially tried to hide annual reports about workforce diversity, arguing that the demographic data were a trade secret. (Oracle and Palantir as recently as 2017 said the data were a trade secret.) However, in the last five years, as scrutiny has intensified, more companies have acknowledged their struggles to have a diverse workforce. Some publish annual reports on the race and gender diversity of their workforce, which have shown limited improvement. But they are more reluctant to admit a pay gap.
In the Oracle lawsuit, initially filed in January 2017, the Labor Department also alleges that Oracle preferred hiring Asians with student visas because they were dependent on Oracle’s sponsorship to stay in the United States and could therefore be systematically underpaid. The department says that Oracle’s college recruiting program hired 500 graduates between 2013 and 2016 for product development roles at its Redwood Shores, Calif., headquarters, 90 percent of whom were Asian. During the same period, Oracle hired only six black people through the recruitment program.
The department argues that pay disparities stem from Oracle’s practice of steering women, Asian people, and black people into lower-paying jobs and relying on prior salaries in order to set their pay at Oracle. In a recent filing, the judge said that the government will need to show that Oracle’s actions were intentional in order to prove its claims about disparate treatment, but it does not need to show bad faith.
The case will be decided by an administrative law judge, not a jury, and is limited to the 2013 to 2016 time period only at Oracle’s headquarters. However, if the department wins, it plans to ask for back pay for discriminatory conduct from 2013 to the present day, along with immediate changes to Oracle’s policies, as well as the cancellation of all of Oracle’s government contracts and to bar Oracle from future contracts until it complies, according to court documents.