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Microsoft Hiring Bias Settlement Sidesteps DOL Pay Claims (1)

Sept. 17, 2020, 1:53 PMUpdated: Sept. 17, 2020, 9:16 PM

Microsoft Corp. will pay $3 million to settle Labor Department allegations of race discrimination in hiring, under an agreement that doesn’t directly address previous claims of pay bias against women from the same agency audits.

Audits of several Microsoft locations across the U.S. found that the technology company’s hiring practices resulted in “a statistically significant disparity” against minority applicants, the DOL’s Office of Federal Contract Compliance Programs said in a conciliation agreement dated Sept. 4.

Microsoft allegedly discriminated against Asian applicants at its location in Las Colinas, Texas; Black and Hispanic applicants in Redmond, Wash.; Asian applicants in New York City; and Asian applicants in Cambridge, Mass.

The monetary portion of the settlement doesn’t cover OFCCP pay bias allegations that arose from the same audits, a source familiar with the settlement process told Bloomberg Law. The agency had alleged that Microsoft paid women less than men, and passed them over for promotions, sources previously told Bloomberg Law.

Former Labor Secretary Alexander Acosta was said to have intervened in an almost-completed deal to settle the pay bias allegations in July 2018 because he thought the agency was letting Microsoft off the hook too easily.

The Labor Department didn’t immediately respond to a request for comment on the recent settlement or the pay bias allegations. However, the agreement states that Microsoft will “continue to conduct annual pay equity analyses of its employees to ensure pay equity using the methodology described in Attachment D.” The referenced attachment is redacted in the publicly available version of the settlement.

The OFCCP regularly and randomly audits businesses that hold federal contracts for compliance with equal employment opportunity laws. It’s settled claims of hiring bias in the past with Wells Fargo, Oldcastle Building Envelope, and Time Warner.

The agreement with Microsoft was made public as the agency continues to pursue high-profile pay discrimination litigation against Oracle and JPMorgan Chase & Co.

“The agency recognized that Microsoft had already addressed their concerns and did not require any changes to our hiring practices,” a Microsoft spokesperson said. “When it comes to diversity and inclusion, Microsoft believes there is always the need for improvement and we remain focused on creating environments where every Microsoft employee is able to do their best work.”

The spokesperson didn’t address the prior pay bias claims.

Microsoft entered into what the agency calls an “early resolution conciliation agreement,” which means the company will monitor to “ensure nondiscriminatory hire and pay practices” at a number of its locations across the country, in exchange for five years free of DOL audits.

(Updated with additional reporting throughout.)

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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