Labor Department Questions Microsoft's Pledge to Hire More Black Employees -- 2nd Update
October 06 2020 - 9:02PM
Dow Jones News
By Khadeeja Safdar
Microsoft Corp. was contacted last week by the U.S. Labor
Department to see whether its pledge to hire more Black employees
constitutes unlawful discrimination.
The software company said the agency overseeing federal
contractors is questioning whether its initiative to double the
number of Black managers and leaders in its U.S. workforce by 2025
violates Title VII of the Civil Rights Act, which prohibits
employment discrimination based on race, color, religion, sex and
national origin. .
"We have every confidence that Microsoft's diversity initiative
complies fully with all U.S. employment laws," Microsoft general
counsel Dev Stahlkopf said in a blog post.
Black employees represent about 4.5% of Microsoft's U.S.
workforce and less than 3% of senior roles, according to the
company's 2019 diversity report. That compares with about 13% of
the U.S. population.
Microsoft made the pledge to improve its diversity ranks in
June, as well as a commitment to invest an additional $150 million
over five years in diversity and inclusion programs. After the
killing of George Floyd in May, it was one of several companies,
from Germany's Adidas AG to Silicon Valley's Facebook Inc., to make
pledges to hire more Black employees.
In a Sept. 29 letter to Microsoft, Craig Leen, director of the
Office of Federal Contract Compliance Programs, said this
initiative "appears to imply that employment action may be taken on
the basis of race." The letter asked Microsoft to prove the actions
it is taking aren't illegal race-based decisions.
The OFCCP is an agency within the Labor Department tasked with
protecting workers and promoting diversity at companies like
Microsoft that are federal contractors. Companies have to report
their diversity and demographic data to the OFCCP and they have to
have an affirmative-action plan for each location.
"Although contractors must establish affirmative-action programs
to set workforce utilization goals for minorities and women based
on availability, contractors must not engage in discriminatory
practices in meeting these goals," wrote Mr. Leen, who was
appointed to run the agency in 2018.
Camille Olson, an employment lawyer with Seyfarth Shaw LLP, said
it is common for companies to set diversity goals and that they are
consistent with the OFCCP's affirmative-action obligations for
contractors. "Setting goals is encouraged," she said. "This is
something companies have done for years and years."
Federal contractors are required to address any areas of
potential discrimination in their ranks, said Cyrus Mehri, a
civil-rights lawyer with Mehri & Skalet PLLC. "These companies
are on sound legal footing if they take steps to address a
documented shortfall," he said.
A Labor Department spokeswoman said the agency "appreciates
Microsoft's assurance on its website that it is not engaging in
racial preferences or quotas in seeking to reach its
affirmative-action and outreach goals. OFCCP looks forward to
working with Microsoft to complete its inquiry."
In September, Microsoft agreed to pay $3 million to settle OFCCP
allegations of discrimination in hiring at four facilities. OFCCP
said audits found hiring disparities against Asian, Black and
Hispanic job applicants. Microsoft didn't admit wrongdoing in the
agreement.
A Microsoft spokesman said the agreement largely involved hiring
concerns from 2012 to 2014. "The agency recognized that Microsoft
had already addressed their concerns and did not require any
changes to our hiring practices," he said.
Last month, the Trump administration issued an executive order
that prohibits companies with federal contracts from participating
in training that "promotes race- or sex-stereotyping or
scapegoating." The OFCCP has created a hotline for workers to
report their companies for potentially violating the order.
In June, Microsoft also said it would step up efforts to fight
racial disparities outside the company, including setting up a $50
million investment fund focused on supporting Black-owned small
businesses. The company pledged to use data and technology to
identify racial disparities in the criminal-justice system and
improve policing.
"We believe it is a core part of our mission to make our
company, our community and our country a place where people of
diverse views and backgrounds are welcomed and can thrive,"
Microsoft said in its blog post.
--Lauren Weber and Eric Morath contributed to this article.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com
(END) Dow Jones Newswires
October 06, 2020 20:47 ET (00:47 GMT)
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