Microsoft plan to increase Black representation in its U.S. workforce probed by Labor Department
Microsoft says the Labor Department is investigating whether its commitment to increase Black representation in its U.S. workforce is discriminatory in what some are warning is a broadside by the Trump administration against corporate initiatives to take on systemic racism following the death of George Floyd.
In a blog post, Microsoft says it believes its June pledge to double the number of Black managers and senior employees by 2025 complies with civil rights laws.
Microsoft is one of a number of U.S. companies that launched initiatives to diversify their mostly white leadership ranks amid national protests after Floyd, a Black man, died under the knee of a white policeman in Minneapolis.
A letter from the the agency overseeing federal contractors for the Labor Department sent to the software giant last week suggested the initiative might be a violation of the Civil Rights Act because it “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,” Microsoft’s general counsel Dev Stahlkopf said in a blog post.
Potentially at stake are federal contracts awarded by the federal government, including a multibillion-dollar cloud computing contract from the Defense Department. The start of work on that contract was delayed by a legal challenge from rival Amazon that claims the bidding process was flawed.
In a statement, the Labor Department's Office of Federal Contract Compliance Programs said it 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."
The move follows an executive order from the Trump administration banning government contractors like Microsoft from offering certain types of racial sensitivity and other kinds of diversity training.
"It looks like the administration is beginning a concerted strategy to tamp down on organizational (diversity, equity and inclusion) efforts," said Joelle Emerson, founder and chief executive officer of diversity and inclusion strategy firm Paradigm.
"Such strategies don't encourage discrimination, they do the exact opposite. A wealth of research shows that in the absence of clear efforts to advance diversity, the outcome is bias against applicants and employees from underrepresented backgrounds," she said.
In September, Microsoft agreed to pay $3 million to settle Labor Department allegations of race discrimination in hiring. Because of that agreement, Microsoft agreed to a review to ensure its hiring practices are not discriminatory, according to the letter from Craig Leen, director of the Labor Department's Office of Federal Contract Compliance Programs.
"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 those goals," Leen said in the letter dated Sept. 29.
The pledge made by Microsoft CEO Satya Nadella, who also committed to investing $150 million over five years in diversity and inclusion programs, "did not reference any established goals in an affirmative action program, and appears to imply that employment action may be taken based on race," Leen said.
"Microsoft isn't perfect. Their current representation numbers show that, like many organizations, they have a long way to go to cultivating a truly diverse, equitable and inclusive culture," Emerson said. "But having a clear perspective and explicit strategy is an important part of achieving that outcome."
Tech industry has shortage of Black talent
The race problem in the tech industry was thrust into the national conversation in 2014 when companies from Facebook to Google disclosed for the first time how few women and people of color they employ. The companies pledged to make their workforces less homogeneous.
The paucity of underrepresented minorities in an industry increasingly dominating the U.S. economy drew sharp scrutiny from company shareholders and Washington lawmakers.
Analyses by USA TODAY and others show major tech companies employ far fewer women and underrepresented minorities than other industries, even in Silicon Valley.
According to the most recent U.S. government data released in 2016, Black Americans make up 3% of employees in the top 75 tech firms in Silicon Valley, while they hold 24% of the jobs in non-tech firms. Black women are also represented at much higher rates in other industries consistent with their proportion of the overall U.S. workforce.
It's not just in technical roles. Minorities at Google and other major tech companies are also sharply underrepresented in non-technical jobs such as sales and administration, with African Americans faring noticeably worse than Hispanics, a USA TODAY investigation in 2014 revealed.
The national discussion about race following the death of Floyd spurred many companies in the tech industry to renew vows to close the racial gap. The president has spoken out against the Black Lives Matter protests.
Diversity consultant Nicole Sanchez said the administration's efforts to undercut initiatives to level the playing field in the corporate world "is not an inquiry into fairness on behalf of Black employees."
"It's a tip of the hat to diversity program naysayers, largely white, who insist that they are being treated unfairly the first time they are made to compete," said Sanchez, founder and chief executive officer of Vaya Consulting.