Oracle Sued: White Males, Indians Receive Different Kinds of Favoritism

By David North, January 24, 2017

Oracle, the big IT company, has been sued by the U.S. Department of Labor for simultaneously:

  • Discriminating in favor of white males in terms of compensation; and
  • Discriminating in favor of Indians, in terms of hiring.

While I do not doubt for a minute that the charges are appropriate, it is a strange case. It was filed by the Obama administration within 48 hours of the end of its term; its odd mix of charges is something I have never seen before; and the firm's partial reliance on H-1B workers is not even mentioned, although this is the mechanism it uses to hire many Indian workers.

That a corporation would prefer to hire Indian nationals as a way of lowering their costs is all too typical of the H-1B users, such as Oracle. This assumed motivation is not mentioned in the DoL document.

The internal decision-making process in this instance must have been interesting. The suit was filed by the DoL's Office of Federal Contract Compliance; the department's segment of the H-1B program is run by the Employment and Training Administration; and the department's organizational chart shows that the two entities have totally separate reporting lines to the secretary. (Disclosure: I was a young political appointee at DoL, when the Kennedy administration created the forerunner to the OFCC.)

The suit was filed by OFCC on the grounds that Oracle, as a government contractor, failed to follow the anti-discrimination rules. That this company (with which I have no ties) was selected for this treatment is another oddity.

It has not laid off American workers and told them to train their replacements, as Disney has done; it is not being sued all the time by its U.S. workers, like the big Indian outsourcing company, Infosys; and it is, by Silicon Valley standards, only a moderate user of H-1Bs. In the last four years it sought about 3,000 H-1Bs, while Infosys applied for 27 times as many, according to the website.

Infosys not only wanted lots more of these semi-indentured workers, its average salary for 2016 H-1B workers was $79,201, compared to $118,624 for Oracle, again using data. So why pick on Oracle?

But those are macro-level comments from an outsider.

What may have triggered the suit can be seen in a close reading of the complaint; some low-level Oracle HR staffers stupidly refused to provide routine employment information to OFCC, which must have irked the regulators. (That's my speculation.) Further, Oracle clearly is a direct U.S. contractor, and Infosys may not be.

So how badly did Oracle overpay its white males? How much did they over-employ "Asian Indians", to use the OFCC's careful term? (Any high-tech firm discriminating in favor of Native Americans would be more likely to receive an award than a lawsuit.)

Don't ask about the numbers in the DoL complaint, because they are all blacked out. When describing the lower salaries for women and others the agency simply redacted the standard deviations it was using to prove their point.

It will be interesting to see what happens next. Chances are it will be settled by an agreement between DoL and the employer, in which the latter agrees not to sin again, plus maybe a payment by Oracle, but the H-1Bs from India will be left in place. I hope I am wrong.