Lawsuit: Palantir Discriminated Against Asian Job Applicants

Federal regulators have sued Palantir—the shadowy data mining company backed by eccentric billionaire Peter Thiel—for allegedly discriminating against Asians.

According to the lawsuit filed this week by the U.S. Department of Labor (DOL), the Palo Alto-based big-data firm routinely picked white hires in lieu of equally qualified Asian applicants. In one example brought up by labor officials, Asians comprised 73 percent of qualified candidates for an internship position but made up only 19 percent of the people Palantir wound up hiring.

The odds of that disparity falling to chance: One in a billion, by the DOL’s calculus.

Authorities call that unacceptable for any company, but especially one that claims $1.2 billion in taxpayer-funded contracts. The accusations could threaten the firm’s government business, as regulators can cancel existing contracts and stop future deals.

“Federal contractors have an obligation to ensure that their hiring practices and policies are free from all forms of discrimination,” Patricia Shiu, head of the U.S. Office of Federal Contract Compliance Program, said in a prepared statement.

Assemblyman Rob Bonta (D-Alameda), who chairs the Asian Pacific Islander Legislative Caucus, said he’s deeply troubled by the claims.

“Discrimination is never justifiable, and it is disgraceful that this remains an issue in 2016,” the state lawmaker said. “Successful companies understand that a diverse workforce adds value and maximizes creativity and productivity.”

Palantir denied the charges and called the decision to litigate a letdown.

“We are disappointed that the [DOL] chose to proceed with an administrative action and firmly deny the allegations,” the company wrote in an announcement. “Despite repeated efforts to highlight the results of our hiring practices, the [DOL] relies on a narrow and flawed statistical analysis relating to three job descriptions from 2010 to 2011.”

Despite requests from several news outlets, however, the company refused to disclose data on the diversity of its workforce.

The implications of the lawsuit should resonate with other Silicon Valley companies, which have a reputation for being overwhelmingly white—especially among the executive ranks. While Asian Americans make up about a third of the workforce at some of the tech industry’s biggest companies, they are dramatically underrepresented in leadership.

A 2015 report called “Hidden in Plain Sight” found that Asians occupied only 14 percent of executive roles at five major tech companies. The numbers are even worse for women of Asian descent, who made up only 3 percent of executives, according to the same study.

Source: Hidden in Plain Sight

Source: Hidden in Plain Sight

The complaint—available here—also undermines the tech industry’s assiduous branding as a meritocracy by showing how startups grow by mining personal connections.

The lawsuit indicates that one of the reasons Palantir apparently favored white applicants over anyone else is because it incentivized employee referrals. Labor officials aren’t accusing the company of overt racism, but of relying on a practice that excluded Asians at a far higher rate than white applicants. Staff recommendations accounted for more than half its hires, according to the DOL claim.

The Equal Employment Opportunity Commission includes a cautionary note about word-of-mouth referrals in its explainer on discriminatory hiring.

“Unless the workforce is racially and ethnically diverse, exclusive reliance on word-of-mouth should be avoided because it is likely to create a barrier to equal employment opportunity for racial or ethic groups that are not already represented in the employer’s workforce,” the watchdog committee explained on its website.

Some companies have worked around that by offering more lucrative incentives for referrals that result in female or minority hires.

The CIA-funded Palantir, whose name is inspired by the Lord of the Rings trilogy, first came under widespread scrutiny in 2013, when Edward Snowden brought attention to its role in illegal government surveillance programs.

In addition to the charges of discriminatory hiring, the 12-year-old company valued at $20 billion by private investors has faced allegations about other improper business practices, among other things. In May, Buzzfeed reported that the government contractor has struggled to curb an employee exodus, lost big clients and may not be raking in as much revenue as it claims.

Thiel made headlines around the same time for admitting to bankrolling lawsuits by Hulk Hogan and other plaintiffs against Gawker, which ultimately led to the website’s demise.

This article has been updated. 

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

9 Comments

  1. Because the projects are secretive CIA govt projects, the company doesn’t want to take the risk of hiring Chinese who may be working on the side for the China govt.

    It’s not fair and it’s not right, but it’s how the world turns. It’s a matter security.

    • Yes, we are safer when we hire white people like Edward Snowden and Harold Martin

  2. San Jose only hires Asian IT people. Saw them all eating at Punjab Cafe this afternoon. Maybe the dejected folks from Palintir should go apply with the city.

    • Are you stalking Asian IT guys? Or are you suggesting San Jose discriminates against non-Asian IT guys? Or both?

    • Would you feel comfortable saying something similar about black people, Robert? Something like this — “X employer only hires blacks. I saw them all eating at a soul food place this afternoon.”

  3. This is yet another Dept. (of Miscarriage) of Justice witch hunt exercise, in this case they’re after Peter Thiel since he endorsed Trump at the last GOP convention.

    The claims in the lawsuit are laughable. The Obama administration alleges that Palantir discriminated against Asians. But it has to admit that Palantir, in fact, hired many Asians — 11 out of 25 software engineers, for example. The government does not even bother to claim that Palantir deliberately excluded Asians. Rather, it argues that since only 44% of Palantir’s software engineers are Asian, but 85% of the applicant pool was Asian, Palantir must, statistically, have discriminated against Asians. In other words: almost all of the software engineers at Palantir have to be Asian, or else it is guilty of “racial discrimination.”

    For the record, Asian population in California is 14.9% (5.6% in the entire U.S.).

    November 8th can’t come soon enough….

  4. There are two ways of looking at this:
    1) All things being equal, if all applicants are equally qualified then it is a slam dunk. Palantir is discriminating.
    2) If Palantir hires only the most qualified/smartest person, and if most applicants are asian and a non asian gets the position then it is a sad reflection on the asian community. Sorry for being a racist. But you all are only exposing your own short comings.

    Sometimes everything is not statistics.

  5. I recall when T.J. Rodgers, the CEO of Cypress Semiconductors, was the next company on the ‘Rev.’ Jesse Jackson’s shakedown list.

    Jackson would go from company to company, and tell them they had to hire lots more blacks; his threat being that he would publicly brand them “racists” if they didn’t do as told.

    Since it was cheaper to pay Jackson a lump sum bribe to go away, rather than extra hire people they didn’t need, the companies paid the “Reverend” his extortion loot. In return, Jackson would say the company was “working to address the problem,” or some other meaningless pablum, and then he would move on to the next mark. It was an extremely lucrative racket, and since Jackson was a “non-profit”, he pocketed the whole payoff.

    Jackson’s shakedown worked perfectly every time. One company after another caved, and paid his blackmail. Jackson’s racket went on for years, beginning with small outfits at first, and then moving up to blue chip companies like IBM.

    The next company on Jackson’s long list of juicy targets was Cypress Semiconductors.

    Cypress CEO T.J. Rodgers politely agreed to meet with Jesse Jackson. When Jackson was done explaining how it worked, Rodgers told him, “I need two hundred software engineers, right now.” Rodgers added, “I will hire every qualified black software engineer you send me.

    Jackson left the meeting — without collecting one dime of shakedown money. Needless to say, he didn’t send Rodgers any software engineers, and he never mentioned Cypress again. After that incident, Jackson’s shakedown racket began to wind down. Other companies saw that all it takes is standing up to race-baiting con artists.

    But that lesson seems to have been forgotten. Now every time Obama barks about ‘race’, his targets tuck tail and roll over, scared to death of being falsely labeled.

    Isn’t it about time that the targets of this kind of incessant race-baiting start to fight back? There has never been a more overtly racist President than Obama. But Peter Thiel has the means to fight this reverse racism racket. If he mans up, the feds will fold. Otherwise, he deserves to lose every dollar it costs him.

    There has to be more than one CEO in this country who rejects Obama’s constant innuendoes; giving the ‘racism’ excuse as the primary reason that blacks fail out of all proportion to their numbers. And if anyone disagrees, just post the names of two hundred black software engineers — not in one company, but in the entire country…