Deloitte pays $21.5 million to settle federal DEI investigation
Deloitte agreed to pay $21.5 million to resolve a Justice Department probe into its hiring and promotion practices, becoming the latest major government contractor to settle over diversity, equity, and inclusion policies.
Deloitte has agreed to pay $21.5 million to settle a federal investigation into its hiring and promotion practices, becoming the latest major company to resolve allegations that its diversity, equity, and inclusion policies violated anti-discrimination law. The Justice Department accused the consulting giant of using race and gender as factors in employment decisions since 2017, which the government said breached requirements imposed on federal contractors.
Attorney General Todd Blanche said in a statement that government contractors cannot reward or penalize employees based on race or sex, adding that labeling such practices as DEI does not make them lawful. The Justice Department specifically objected to Deloitte's tracking of demographic data, its practice of tying diversity goals to executive compensation, and DEI policies that applied to employees working on federal contracts.
A Deloitte spokesperson said the company was pleased to resolve the matter to avoid the cost and distraction of protracted litigation, allowing it to remain focused on attracting and developing talent with the skills clients rely on. The settlement follows a similar agreement with IBM in April, when the technology company paid $17 million over allegations involving diverse interview slates and a diversity modifier that influenced bonus decisions. PayPal also reached a $30 million settlement in May over an investment program for Black and minority-owned businesses, though that case was not brought under the False Claims Act.
The Justice Department has been quietly probing high-profile employers over their DEI policies for the past year, using the Civil Rights Fraud Initiative to investigate private sector companies and academic institutions. According to a Wall Street Journal report, the department also opened investigations into Verizon and Alphabet, Google's parent company, requesting documents on their workplace programs. Both companies made significant changes to their DEI initiatives last year.
These cases align with the Trump administration's broader focus on DEI since taking office, but they also reflect similar efforts across other parts of the government. Last month, the Equal Employment Opportunity Commission voted to eliminate EEO-1 reports, the annual demographic breakdown that employers have been legally required to file for 60 years. Under chair Andrea Lucas, the EEOC has launched a public campaign against what it describes as DEI-related discrimination, soliciting outreach from white men who claim they faced discrimination and reportedly prioritizing those cases even with limited evidence.
The administration has continued to find new avenues to challenge DEI programs and affirmative action efforts, and companies appear willing to settle rather than face years of litigation and public scrutiny. A high-profile EEOC investigation into Nike has put the sportswear company under intense scrutiny, and its outcome could have broader consequences for corporate DEI practices across the country.
