Deloitte will pay US regulators $21.5 million after a probe found race- and sex-based hiring targets breached federal contractor rules
Deloitte has agreed to pay the United States government US$21.5 million to settle allegations that its diversity, equity and inclusion (DEI) practices breached federal anti-discrimination requirements. The US Department of Justice (DOJ) announced the settlement, covering conduct it says occurred between 2017 and August 2026.
The DOJ said Deloitte's business units received monthly summaries tracking progress against "demographic goals", and that roughly 150 senior partners, principals and managing directors had part of their remuneration tied to helping the firm meet those targets, with some facing the loss of tens of thousands of dollars a year.
Investigators also alleged race and sex were factored into promotion decisions to partner and managing director level, and that access to some training and mentoring programs was similarly restricted.
The case was brought under the False Claims Act (FCA), a law historically used to police healthcare fraud, on the basis that Deloitte had falsely certified compliance with anti-discrimination clauses required of federal contractors.
"Government contractors cannot reward or penalise employees based on race or sex, and labelling the practice DEI does not make it lawful," said US Attorney-General Todd Blanche in Washington.
Deloitte's response
Deloitte denies engaging in discriminatory conduct, and the settlement is not an admission of liability. A company spokesperson said the firm was "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".
The settlement also resolves a whistleblower claim brought by the American Alliance for Equal Rights, a group founded by US anti-affirmative-action campaigner Edward Blum. Blum's organisation will receive $4.3 million of the payout.
Part of a wider crackdown
The action follows President Donald Trump's January 2025 executive order directing federal contractors to eliminate DEI programs, and comes three months after IBM paid $17 million to settle similar allegations – the first such FCA settlement of its kind. Alphabet's Google and Verizon have also faced DOJ document requests over their workplace programs.
The pressure isn't confined to the US. Google's decision to wind back its diversity hiring targets has already rippled into how multinationals frame DEI commitments outside America, while Australian employers remain split on whether such programs work at all – a Robert Half survey on how Australian employers view DEI programs found opinion nearly evenly divided on impact.
Government agencies are taking a different tack: DFAT's new diversity and inclusion strategy for its own workforce sets explicit representation targets through to 2027.
For HR leaders at multinational or US-linked employers, the Deloitte case is a reminder that DEI program design – particularly anything resembling demographic targets tied to pay or promotion – is now squarely in US regulators' sights, regardless of where a firm is headquartered.
