January 19, 2017

Department of Labor Files Complaint Against Oracle for Alleged Discrimination in Compensation and Hiring

It seems that OFCCP and the Department of Labor (DOL) has been active in early 2017. So far in January we have seen a number of press release worthy settlements and lawsuits. This week, in addition to the lawsuit with JPMorgan Chase, DOL released information on their lawsuit with Oracle America, Inc. (Oracle).

Oracle is a technology company, offering integrated cloud application and platform service, and due to its contracts with the Federal government, also a Federal contractor subject to routine compliance evaluations from OFCCP. OFCCP and DOL have alleged that Oracle discriminated against female, Black and Asian employees in pay. A second allegation focuses on hiring, in which the suit claims that Oracle discriminated against non-Asian applicants. The complaint also describes a refusal to turn over requested records as it relates to prior pay and applicant data/records.

Both the allegations and analyses in this complaint are fascinating. We’ve written many times about aggregation issues on this blog, and this complaint is ripe with examples of when aggregation goes bad. A few highlights from DOL’s press release and the  complaint are summarized below:

  • In reading the press release pay seems to be analyzed by title, however once digging in to the actual complaint it is apparent that pay analysis groups (PAGs) were conducted by line of business. The allegations center around 3 lines of business which include 80 different job titles across the three.  Unfortunately, these large PAGs have become the norm under Directive 307. Although job title is controlled for in the analysis, there are constraints with using this method, and it does not necessarily mean that employees are similarly situated.
  • Similar to pay, applicant analyses are also conducted at an aggregate level – seemingly job group and line of business, which include 69 job titles. These groups are listed as: Professional Technical 1, Individual Contributor (PT1) job group and Product Development line of business (or job function). Due to this mixed bag of job group and function, it’s unclear whether these are legitimate groups that Oracle hires from or whether these are different aggregations created by OFCCP.
  • Further, data may have been aggregated across plan years. Based on the complaint, hiring allegations are only based on data from the first 6 months of the plan year (January 1, 2013 through June 30, 2013), however it is more probable that it was an 18-month time frame given the data that OFCCP had access to. If that is the case, given the size of the location (approximately 7,000 employees), and the types of jobs in the groups listed, it wouldn’t be unreasonable to expect there to be thousands of applicants in the analysis pools.
  • Non-Asian is not a protected class and rather a random aggregation of all race and ethnicities that are not Asian. This grouping is inappropriate and has been previously rebutted by the courts – see our previous blog on OFCCP v. VF Jeanswear Limited.
  • Although not specifically tied to data aggregation – it’s interesting to note that OFCCP also documented findings of comparisons to the national labor data and deemed Asians to be overrepresented in the applicant pool. This was used as evidence of Oracle’s preference for Asians and its target recruitment of the group.

By Amanda Shapiro, Senior Consultant, DCI Consulting Group

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