The Department of Labor has warned two major firms that their publicly stated plans to hire more black people amid the Black Lives Matter protests are potentially discriminatory and could result in the loss of massive federal contracts.
In letters provided to Secrets, the department demanded Wells Fargo and Microsoft to explain the promises made by top executives to single out black people for new hiring.
In a letter to Wells Fargo, the department said the company had gone beyond promoting affirmative action when CEO Charles Scharf said the banking giant was “committed to doubling black leadership over the next five years.”
In its letter to Microsoft, the Labor Department’s Office of Federal Contract Compliance Programs made the same argument after CEO Satya Nadella said the firm and federal contractor “will double the number of black and African American people managers, senior individual contributors, and senior leaders in the United States by 2025.”
A Labor Department official said both comments went far beyond the comments and pledges of other firms to make sure black people are represented in top ranks, promises that poured out of corporate America’s executive offices amid the Black Lives Matter movement.
In both cases, the department warned that hiring only black people would violate anti-discrimination laws and would jeopardize federal contracts.
In response to questions, Microsoft posted a long response online late yesterday. Wells Fargo also issued a statement. Both said that their new hiring plans meet federal guidelines. The Labor Department said it is studying their responses.
Wells Fargo told Secrets, “Wells Fargo is committed to and taking action to become a more diverse and inclusive company. Numerous efforts are underway to implement changes at all levels of the company, and we are confident that they comply with U.S. employment laws.”
Microsoft Vice President Dev Stahlkopf said, “We have every confidence that Microsoft’s diversity initiative complies fully with all U.S. employment laws.”
Both supplied links to their diversity programs.
Stahlkopf, detailing the program, added, “The OFCCP suggested that this initiative ‘appears to imply that employment action may be taken on the basis of race.’ The letter asked us to prove that the actions we are taking to improve opportunities are not illegal race-based decisions. Emphatically, they are not.”
The Labor Department official said that the department hoped the letters to the major corporations and their responses will serve as warnings to other contractors to avoid favoring one minority over others in reacting to the current political climate.
Citing a Johnson-era executive order, the department said in its letter to Microsoft, “E.O. 11246 prohibits contractors from ‘discriminat[ing] against any employee or applicant for employment because of race.’ Contractors may not discriminate on the basis of race or color for the purpose of providing additional opportunities to individuals of a particular race, and quotas ‘are expressly forbidden.’”
