Deloitte settles US anti-DEI case for $21m

The U.S. Department of Justice (DOJ) has announced a settlement with Deloitte, in which the global professional services firm will pay $21.5 million. This settlement addresses allegations that Deloitte engaged in discrimination against employees and applicants based on race or sex by employing Diversity, Equity, and Inclusion (DEI) goals in its hiring, promotions, and staffing decisions.

These allegations are part of the DOJ’s Civil Rights Fraud Initiative, launched to address the use of DEI policies by federal contractors and other recipients of federal funds, such as universities, through the False Claims Act. This Act mandates that federal contractors certify their compliance with civil rights laws.

The momentum against DEI initiatives has increased since President Trump’s election, marked by an Executive Order eliminating DEI preferencing in federal contracting and requiring contractors to affirm non-engagement in illegal discrimination, including illegal DEI. Recently, the DOJ has also announced a $30 million settlement with PayPal related to DEI issues and launched an investigation into Nike for alleged discrimination against white workers through its DEI programs. Additionally, a lawsuit has been initiated against the New York Times, alleging discrimination by passing over a white male employee for a promotion due to its DEI policies.

U.S. Associate Attorney General Stanley E. Woodward Jr. stated, “Today’s settlement is yet another example of this Department’s commitment to eliminating woke, unconstitutional practices from American workplaces.”

In its announcement, the DOJ outlined several allegations against Deloitte, asserting that the firm considered race or sex in hiring, promotion, and staffing decisions to meet non-public race and sex-based workforce composition goals. Among the claims, it was noted that Deloitte’s business units received monthly summaries highlighting progress toward demographic goals, and Partners, Principals, and Managing Directors were evaluated partly on their contributions to achieving these workforce goals.

The U.S. also alleged that Deloitte’s demographic goals influenced promotion decisions, with business units assigned race and sex-based targets for their yearly PPMD classes. Additionally, the firm set demographic goals for employees staffed to federal contracts and restricted eligibility for certain programs and opportunities based on race or sex.

U.S. Attorney General Todd Blanche stated, “Government contractors cannot reward or penalise employees based on race or sex — and labelling the practice DEI does not make it lawful. The Justice Department will aggressively pursue government contractors that have used taxpayer dollars to fund unlawful discrimination.”