The long running audit of Oracle by the U.S. Department of Labor’s Office of Federal Contract Compliance (OFCCP) has turned in favor of the OFCCP.  The two areas of contention include first, that an analysis of Oracle pay data shows it shorted thousands of females, black, and Asian workers by as much as five figures relative to their white colleagues each year from 2013 through 2016.  Second, Oracle favored Asian applicants over non-Asian job applicants, particularly Hispanic and black applicants. 

The audit of Oracle began in 2014 at its corporate headquarters in Redding, California.  The initial analysis of Oracle’s data during the audit found that there were disparities in the compensation of women relative to men employed in the Product Development, Information Technology, and Support job functions at Oracle's HQCA; disparities in the pay of Asians, and Blacks or African Americans relative to Whites employed in Oracle's Product Development job function at Oracle's HQCA; and disparities in the hiring of non-Asian applicants relative to Asian applicants.

At the time of the audit, Oracle did not comply with the OFCCP’s routine requests for employment data and records.  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 initial complaint was filed in January 2017 but was on pause.  Oracle had filed a motion for summary judgement, but the case was restarted in early January 2019 when the Department of Labor (DOL) Administrative Law Judge denied the motion.  The motion for the amended complaint filing came 11 days later on January 22.

The amended complaint alleges that after a preliminary analysis of data by OFCCP in October and November of 2017, it confirmed OFCCP's original claims and shows stark patterns of discrimination that began in at least 2013 and continued well past the review period, as alleged in the original complaint.  For example, OFCCP alleges that Oracle's college and university hiring practices strongly preferred Asian college and university graduates, especially from India, to all others. This preference is so strong that of the approximately 500 college and university hires made by Oracle from 2013 to 2016, approximately 450, or 90%, were Asian.  The analysis also showed that Oracle hired zero Black or Hispanic recent college and university graduates.

OFCCP also alleged that this preference for a workforce that is dependent on Oracle for authorization to work in the United States lent itself to suppression of that workforce's wages. Many of these graduates would be hired through the H-1B program.  Oracle's focus on hiring Asian college and university graduates further resulted in the refusal to hire more than 100 qualified, non-Asian, applicants for employment.

Moreover, OFCCP not only alleged that Oracle did not provide data as requested to OFCCP, but also destroyed requested documentation during the course of the audit.  The data that was submitted was unreliable and did not comply with the OFCCP’s record-keeping requirements.  The OFCCP contends Oracle failed to appropriately track all applicants who met the basic qualifications for its college recruiting program, because it did not capture applicant data until after a subsequent screening had taken place. The applicant data was also deemed unreliable because Oracle purportedly failed to solicit race, ethnicity, and gender information from the subset of applicants it tracked.

Oracle responded, accusing the OFCCP of colluding with plaintiff law firms. The company argues that OFCCP’s attempt to expand the scope of workplace discrimination claims show either the original case was “doomed to fail” or that regulators hoped widespread publication of unflattering statements would exert pressure on the tech company.  Further, the company alleges that OFCCP was working “in coordination with plaintiffs’ counsel prosecuting a civil action against Oracle that those plaintiffs admit piggy-backs on OFCCP’s claims, and with whom OFCCP entered into a secret oral agreement to share information and work together.”

How this case will play out remains unknown, but it’s definitely getting interesting.  This case appears to be the first OFCCP audit pursuing national origin discrimination claiming the H-1B’s are causing a suppression of wages.  National origin discrimination is not new to OFCCP.  For example, Palantir Technologies settled an OFCCP audit in which although thousands of applicants were Asian, the hiring preference was for non-Asians, which indicators in some cases showed a deviation of five or more.

These cases show the importance of making sure proper documentation is maintained and that job postings identify specifically whether citizenship is required for a job or whether the company will or will not sponsor H-1B.

Source:  The Recorder 2/6/18 OFCCP, Seyfarth Shaw 1/25/19