Deloitte To Pay $21.5 Mn To Settle US DEI Discrimination Charges

Deloitte has agreed to pay $21.5 million to settle claims that it violated federal contracting laws through discriminatory diversity practices, the US Department of Justice (DOJ) said in a news release on Tuesday.

The settlement was reached under the False Claims Act, through the DOJ's Civil Rights Fraud Initiative, launched in May 2025. According to the department, federal contracts generally require companies to provide equal employment opportunities to workers and job applicants, and contractors must certify that they will not discriminate based on race or sex. The DOJ said Deloitte had falsely certified compliance with these requirements since 2017, while making hiring, promotion and staffing decisions based on race and sex.

What The DOJ Alleged

According to the DOJ, Deloitte tracked progress toward internal, non-public workforce composition goals based on race and sex. Business units reportedly received monthly summaries rating their performance against these goals in green, yellow or red, depending on whether targets were exceeded, met, narrowly missed, or significantly missed.

The department also alleged that Deloitte assessed its Partners, Principals and Managing Directors (PPMDs) partly on how they contributed to these workforce targets. For two years, compensation for around 150 of the company's most senior PPMDs could reportedly be affected if their respective business units failed to meet the demographic goals.

The DOJ further alleged that promotion decisions were influenced by yearly targets for the racial and sex composition of PPMD classes across business units. It cited one instance in which a PPMD candidate class initially met Deloitte's demographic targets. When the list of candidates was circulated, the DOJ said, Deloitte identified them by race and sex in a spreadsheet and suggested that those selecting candidates promote certain employees to "equitably maintain the current mix."

The department also alleged that Deloitte's diversity, equity and inclusion (DEI) initiatives raised its operating costs, which were ultimately passed on to the government through higher fees.

Deloitte has denied the allegations but agreed to pay $10 million in restitution and $11.5 million to settle the matter, according to a Financial Times report. The firm is one of the largest consultants to the US government, and its contracts require compliance with anti-discrimination practices.

A company spokesperson said, "We are pleased to have resolved this matter to avoid the cost and distraction of protracted litigation, allowing us to remain focused on attracting and developing exceptional talent with the skills and capabilities our clients rely on every day."

The settlement comes about three months after IBM agreed to pay $17.1 million to resolve similar allegations. US companies have faced growing scrutiny over their DEI practices during President Trump's second term, prompting many to scale back public commitments and downplay earlier initiatives.

Deloitte has also stopped publishing its annual DEI transparency report, which had earlier outlined targets to increase the proportion of Black and Hispanic employees and women in its workforce.