Deloitte Settles Diversity Hiring Claims for $21.5M

The settlement, announced Thursday, includes a $10 million restitution payment and an $11.5 million civil penalty. The Justice Department brought the case under the False Claims Act, alleging Deloitte falsely certified compliance with equal employment opportunity laws while using race- and sex-based targets in internal decisions.

The lawsuit originated as a whistleblower complaint filed by the American Alliance for Equal Rights, a conservative group led by Edward Blum. The organization will receive $4.3 million from the recovered funds.

Federal prosecutors said Deloitte set non-public demographic goals and tracked progress with monthly reports across business units. These targets influenced promotions, project staffing, and entry into leadership development programs. About 150 senior partners, principals, and managing directors faced potential pay adjustments based on whether their units met the goals.

The Justice Department also argued that the cost of running these initiatives was passed to federal clients through higher billing rates. Attorney General Todd Blanche said in a statement, "Government contractors cannot reward or penalize employees based on race or sex, and labeling the practice DEI does not make it lawful."

Deloitte denied wrongdoing and made no admission of liability. The company said settling avoids the expense and distraction of litigation. This follows a similar $17.1 million settlement by IBM, and Deloitte has stopped publishing its annual diversity reports amid regulatory scrutiny.