Oracle accused of underpaying women, minorities by $400 million

Labor Department says the company "channeled" women and people of color into lower-paying careers at the software maker.

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Oracle is accused of shorting women and minorities out of $400 million in wages.

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Oracle engaged in systematic discrimination that shorted female and minority employees more than $400 million in wages, according to a new legal filing by US Department of Labor.

The complaint alleges that Oracle discriminates against women and people of color at the company by starting them at low-level jobs and low initial pay. It also accuses Oracle of "channeling" these employees into lower-paying careers at the business software maker.

"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," the Labor Department said in its lawsuit Tuesday.

In addition, the lawsuit alleges that Oracle has a strong preference for hiring Asians who are recent college graduates, saying that about 90 percent of the company's 500 college and university hires made between 2013 and 2016 were Asian. It alleges as well that Oracle prefers to hire visa-holding Asians who recently graduated college, a preference the Labor Department says "lends itself to suppression of that workforce's wages."

Oracle called the lawsuit "meritless" and said it was in compliance with its regulatory obligations.

"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 General Counsel Dorian Daley said in a statement Wednesday. "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," Daley said.

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The pay gap is one of many diversity issues confronting companies in the tech industry . Silicon Valley has faced tough questions about the treatment of women and minorities, and the industry continues to struggle with recruitment, retention and promotion.

On average, 30 percent of the tech industry workforce is female, but studies indicate that more diverse teams, in terms of gender and race, show greater creativity and experimentation -- and get better results.

The lawsuit stems from a 2014 audit conducted by the Labor Department's Office of Federal Contract Compliance Programs. That office, which is responsible for ensuring that companies doing business with the federal government comply with equal pay and other nondiscrimination requirements, filed a similar lawsuit against Oracle in 2017.

The complaint goes on to accuse Oracle of not cooperating with the investigation and says it "destroyed records relating to its hiring process as the case was ongoing."

Originally published Jan. 22 at 4:07 p.m. PT
Updated Jan. 23 at 3:50 p.m. with Oracle statement.

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