U.S. Labor Department Sues Oracle Claiming Hiring, Pay Infractions

The U.S. Department of Labor warns that the lawsuit could cost Oracle multiple millions of dollars in federal IT contracts if it is found in litigation to be non-compliant to federal rules.

The U.S. Department of Labor on Jan. 18 filed a lawsuit contending that Oracle, one of the world's largest IT product and services providers, has made a practice of paying white men more than other men and women and for unfairly favoring Asian workers when recruiting and hiring for technical positions.

The DoL also filed a similar lawsuit Jan. 18 regarding unfair labor-practice allegations against JP Morgan Chase. In September 2016, the department filed litigation against federal government security and analytics contractor Palantir for allegedly discriminating against Asian job applicants.

Oracle flatly denied the merits of the legal action against it. The company has been in business since 1977 and employs 136,000 globally--37 percent of which are classified as minorities and 29 percent of which are women. Women comprise 25 percent of the company's management positions.

Compliance Review Was Started in 2014

The lawsuit filed by the DoL's Office of Federal Contract Compliance Programs is the result of its compliance review of Oracle's equal employment opportunity practices at its Redwood City, Calif. headquarters.

"During the investigation–which began in 2014–Oracle refused to comply with the agency’s routine requests for employment data and records," the DoL said in its announcement. "For example, Oracle refused to provide prior-year compensation data for all employees, complete hiring data for certain business lines, and employee complaints of discrimination. OFCCP attempted for almost a year to resolve Oracle's alleged discrimination violations before filing the suit."

The DoL warned that the lawsuit ultimately could cost Oracle multiple millions of dollars in federal IT contracts if it is found in litigation to be non-compliant to federal rules. The IT giant makes database, middleware and cloud-based software and data center hardware used by numerous enterprises and the federal government, the military and state and local governments.

Oracle, along with all other federal contractors, cannot discriminate in hiring based on race, color, religion, sex, sexual orientation, gender identity, national origin, disability or against military veterans. According to DoL rules, Oracle must permit the federal government to review records and information relevant to the company's compliance with equal employment laws administered by OFCCP, according to the Labor Department.

Charge: Oracle Pays White Men More Than Others

In the lawsuit, the DoL alleged that Oracle has a systemic practice of paying Caucasian male workers more than their counterparts in the same job title, which led to pay discrimination against female, African American and Asian employees.

The suit also challenges Oracle's "systemic practice" of favoring Asian workers in its recruiting and hiring practices for product development and other technical roles, which resulted in hiring discrimination against non-Asian applicants.

"The complaint is politically motivated, based on false allegations, and wholly without merit," Oracle spokeswoman Deborah Hellinger said. "Oracle values diversity and inclusion, and is a responsible equal opportunity and affirmative action employer. Our hiring and pay decisions are non-discriminatory and made based on legitimate business factors, including experience and merit."

The fact that the lawsuits against Oracle and JP Morgan Chase were filed in the final 72 hours of the Obama administration's eight years in power suggests political motivation is at play here, a source with knowledge of the matter who requested anonymity told eWEEK.

Source Cites Possible Political Motivation

"They have filed against Palantir and Oracle, two companies with public ties to the current administration, in the three last days of the Obama administration in an effort to pressure the new administration. It's meant to embarrass the Trump administration; they will be stuck with these lawsuits, and the labor side will cast aspersions on the Trump administration if it moves to change the litigation posture favorably/fairly to business," the source told eWEEK.

The lawsuits are being filed as Silicon Valley faces increasing pressure to increase diversity across the tech industry, which, in fact, has long been dominated by white and Asian men. In recent years, most technology companies have begun to make public commitments to STEM (science, technology, engineering, mathematics) education and to hire more women and minorities, but progress has been slow across the board.

Oracle, for its part, has made it a priority to focus on early educational IT schooling for junior high and high school students of all cultures. The company, in fact, built a new tech-oriented high school near its Redwood Shores campus for this purpose.

Chris Preimesberger

Chris Preimesberger

Chris Preimesberger is Editor of Features & Analysis at eWEEK, responsible in part for the publication's coverage areas. In his 10 years and more than 3,500 stories at eWEEK, he has distinguished...