Palantir accused of racial bias in hiring
Secretive company says feds rely on flawed statistical analysis
PALO ALTO — The U.S. Department of Labor on Monday accused secretive data startup Palantir of discriminating against Asian job applicants, making the company the latest in the Silicon Valley tech community to face accusations of workplace bias.
The Palo Alto company disproportionately turned qualified Asian candidates away from certain engineering positions, according to a lawsuit filed against the company by the Department of Labor. The suit comes as many largely white, male-dominated tech companies in Silicon Valley are facing growing pressure to diversity their workforces.
A Palantir spokeswoman
denied the accusations of discrimination.
“Despite repeated efforts to highlight the results of our hiring practices, the Department of Labor relies on a narrow and flawed statistical analysis relating to three job descriptions from 2010 to 2011,” spokeswoman Lisa Gordon wrote in an emailed statement. “We intend to vigorously defend against the allegations.”
Now the $20 billion company launched by PayPal founder Peter Thiel is at risk of losing its federal government contracts. That could be a major blow for Palantir, which first made a name for itself working on top-secret data projects for agencies including the FBI and CIA. Since 2010, Palantir has worked on federal contracts worth more than $340 million, according to the complaint. Its data analysis software is rumored to have helped U.S. forces hunt down Osama bin Laden and prosecutors convict Ponzi schemer Bernie Madoff.
The lawsuit seeks an order that would cancel Palantir’s existing federal government contracts and block future agreements until the company fixes its alleged discrimination issues.
Investigators who began looking at Palantir’s hiring policies in 2011 say the applicant pools for several engineering positions were overwhelmingly Asian, but Asians made up only a small fraction of engineers hired. About 85 percent of applicants for the company’s software engineer positions were Asian, but Palantir hired 14 non-Asian engineers and 11 Asian engineers for the role, according to the complaint. The odds of achieving that result by chance are one in 3.4 million, investigators found.
Regulators in part blame that outcome on Palantir’s tendency to rely on employee referrals to fill those positions.
“Federal contractors have an obligation to ensure that their hiring practices and policies are free of all forms of discrimination,” Patricia Shiu, director of the DOL’s Office of Federal Contract Compliance Programs, wrote in a news release announcing the lawsuit. “Our nation’s taxpayers deserve to know that companies employed with public funds are providing equal opportunity for job seekers.”
The lawsuit, filed with the Department of Labor Office of Administrative Law Judges, accuses Palantir of violating an executive order that prohibits government contractors from discriminating against employees or applicants for factors including race, religion and sex. The Labor Department claims it tried, and failed, to work with Palantir to correct the violation before suing.
Discrimination is a hotbutton issue in the tech community, but the Palantir lawsuit is unique in that it focuses on a minority group that, at least on the surface, appears to be well represented in Silicon Valley. Earlier this year Facebook reported that nearly half of its tech employees are Asian, and Intel and Google have similarly high numbers.
“This is unusual,” said Buck Gee, a former Cisco executive who studies Asian diversity in Silicon Valley, said of the accusations against Palantir. “If it’s true, it would be an anomaly.”
But Gee said Asian employees are less likely to be promoted once they are hired. At Facebook, for example, just 21 percent of the company’s senior leadership staff is Asian.
As for the Palantir lawsuit, Gee is skeptical about the discrimination claims. The complaint leaves out key information, he said, such as what percentage of the company’s overall workforce is Asian. And the Labor Department didn’t explain how it determined which rejected applicants were qualified for the engineering jobs in question.
“The numbers are very interesting,” Gee said. “They’re not dispositive. It certainly raises a red flag, but does not show anything definitive.”