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U.S. Labor Department Looks To Elevate Discrimination Lawsuit Against Oracle

The watchdog that oversees hiring practices by federal contractors says Oracle's discrimination against women and minorities in hiring and compensation is worse than initially thought. Oracle calls the lawsuit ‘meritless.’

The U.S. Department of Labor is escalating accusations of discriminatory hiring practices by Oracle in a legal action that threatens the software giant's lucrative federal contracts.

The DOL's Office of Federal Contract Compliance Programs, which oversees hiring practices by federal contractors, asked an administrative body Tuesday to accept revisions to its 2017 complaint charging Oracle with discriminating against women and minorities, and of favoring recruitment of Indian workers in the country on visas so it could suppress their wages.

Data received by the OFCCP in October and November of 2017 strengthen the original claims, the office said in a motion seeking to amend its complaint, "and confirms that stark patterns of discrimination" began as early as 2013.

[Related: AWS Rips Oracle's JEDI Cloud Bid Protest In New Court Filing]

Oracle discriminated against women, African-American and Asian employees working in its Redwood Shores, Calif. headquarters in both hiring practices and compensation, the OFCCP argues.

Oracle denied those charges in a public statement.

"This meritless lawsuit is based on false allegations and a seriously flawed process within the OFCCP that relies on cherry picked statistics rather than reality," Oracle Executive Vice President and General Counsel Dorian Daley said.

"We fiercely disagree with the spurious claims and will continue in the process to prove them false. We are in compliance with our regulatory obligations, committed to equality, and proud of our employees."

The OFCCP alleges that Oracle was able to suppress compensation by two methods: reliance on prior salary in setting initial pay, pushing impacted minorities into lower-paid career paths at the company.

The office's preliminary analysis of limited information obtained through the discovery process "shows that Oracle suppressed starting salaries for its female and non-White employees, assigned them to lower level positions and depressed their wages over the years they worked at Oracle."

Those groups, in total, lost more than $400 million in compensation.

The amended lawsuit will also describe in more detail Oracle's "highly discriminatory college and university hiring practices," the motion reads.

The company "preferred Asian recent college and university graduates to all others," the OFCCP charges. To back that claim it offered this statistic: of some 500 hires of recent grads between 2013 and 2016, 90 percent were Asian.

The population of recent grads Oracle would be targeting based on their relevant studies and the type of available positions is 65 percent Asian, by contrast, the complaint states.

Making matters worse, for several years Oracle didn't hire a single black or Hispanic recent graduate.

The preference for hiring Asians is even more pronounced among those working in the country on Visas.

That includes a program within Oracle that looks to hire a set number of graduates every year from Indian academic institutions, the complaint states.

Because those people are dependent on Oracle to work in the U.S., their wages are easier to suppress.

That preference "resulted in the refusal to hire more than 100 qualified, non-Asian, applicants for employment," the motion reads.

The federal hiring watchdog goes on to accuse Oracle of not preserving information it was required to through the course of the legal action—going as far as destroying records of hiring practices as the case was ongoing.

The lawsuit threatens government contracts for Oracle and its partners. The company launched its business decades ago by supplying database software to national security agencies, and its continued role as a federal contractor makes it subject to federal oversight of its hiring practices.

Oracle currently does some $100 million in business with the federal government every year, the motion states.

The compliance review of Oracle's hiring practices started in September 2014—a time when Silicon Valley's lack of diversity began to receive more outside scrutiny. That led to the lawsuit filed with the United States Department Of Labor Office Of Administrative Law Judges in 2017.

When the lawsuit was initiated, an Oracle representative said the complaint was "politically motivated."

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