Deloitte agrees to pay $21.5 million to settle DOJ probe into DEI practices

Accounting firm Deloitte agreed to pay $21.5 million to settle Department of Justice allegations that it violated the False Claims Act by failing to comply with anti-discrimination requirements in federal contracts and discriminating on the basis of race or sex, the department announced Tuesday.

The settlement resolves allegations that Deloitte violated the False Claims Act by failing to comply with anti-discrimination requirements in its federal contracts and allegedly discriminating against employees and applicants on the basis of their race or sex, according to the DOJ. The DOJ said business units within Deloitte received monthly summaries tracking the "demographic goals" and alleged that the company's partners, principals and managing directors were evaluated, in part, based on their contributions to helping it achieve its workforce composition goals.

Deloitte agreed to pay $21.5 million to settle a Department of Justice probe into the company's diversity, equity and inclusion practices. (Jack Taylor/Getty Images / Getty Images)

The DEI goals, according to the DOJ, attempted to boost the representation of the Black and Hispanic communities in promotion decisions. "Government contractors cannot reward or penalize employees based on race or sex — and labeling the practice DEI does not make it lawful," Attorney General Todd Blanche said in a statement. "The Justice Department will aggressively pursue government contractors that have used taxpayer dollars to fund unlawful discrimination."

Deloitte denies allegations of discriminatory conduct and said the settlement agreement does not represent an admission of liability. The company said it was pleased to resolve the matter to "avoid the cost and distraction of protracted litigation." The DOJ said the claims resolved in the settlement are allegations only and that there has been no determination of liability.

Deloitte denies allegations of discriminatory conduct and said the settlement agreement does not represent an admission of liability. (Photo by Artur Widak/NurPhoto via Getty Image / Getty Images)

The settlement also resolves claims brought under the False Claims Act’s qui tam provisions by the American Alliance for Equal Rights, a group founded by conservative activist and affirmative action opponent Edward Blum, which allows private parties, known as relators, to bring cases on the government’s behalf and potentially receive a share of any recovery . Whistleblowers are entitled to a cut of any recovery in these cases. Blum's group will receive $4.3 million as part of Tuesday's agreement, the DOJ said.

Attorney General Todd Blanche said "labeling the practice DEI does not make it lawful." (Alex Wroblewski / AFP via Getty Images / Getty Images)