Deloitte to Pay $21.5 Million to Settle Federal Allegations of Race- and Sex-Based Bias

A Deloitte sign in Ottawa on Dec. 11, 2025. The Canadian Press/Sean KilpatrickDeloitte agreed Tuesday to pay $21.5 million to settle federal allegations that the professional services firm falsely certified compliance with anti-discrimination requirements while using race and sex in employment decisions connected to its diversity initiatives.The U.S. Justice Department announced the settlement. The agreement covers conduct from Jan. 1, 2017, through Aug. 21, 2026, and involves Deloitte and four related entities that perform work under contracts with federal agencies.Deloitte denied the allegations, and the settlement does not constitute an admission of liability, according to the settlement document. Deloitte did not respond to an email seeking comment in time for publication.Most federal contracts require contractors to certify that they provide equal employment opportunities and make employment decisions without regard to race or sex. The government alleged Deloitte made hiring, promotion and staffing decisions that were discriminatory based on race and sex.According to the settlement, Deloitte established goals for the racial and sex composition of its workforce. Managers received monthly reports that marked progress of work units toward those goals in green, yellow, or red, depending on whether the unit was meeting its target.Partners, principals and managing directors were evaluated partly on their contributions toward meeting the goals, the government alleged. For two years, the compensation of approximately 150 senior employees could be affected if their business units missed the demographic targets, with some facing the loss of tens of thousands of dollars annually, according to the settlement.The government also alleged that Deloitte considered race and sex when selecting employees for promotion to partner, principal, or managing director. In one instance, candidates were identified by race and sex on a spreadsheet, and those involved in the selection process were urged to “watch this list carefully” and “equitably maintain the current mix.”Deloitte’s Consulting DEI leader had asked if “diverse” candidates could be “accelerated” and asked the business leaders to consider one to two candidates that could meet the diversity goals, according to the DOJ.“Government contractors cannot reward or penalize employees based on race or sex—and labeling the practice DEI does not make it lawful,” said Attorney General Todd Blanche in a statement. “The Justice Department will aggressively pursue government contractors that have used taxpayer dollars to fund unlawful discrimination.”Of the $21.5 million settlement, $9.995 million is designated as restitution. Deloitte must also pay 4 percent annual interest calculated from Aug. 11.The case was filed under the False Claims Act’s whistleblower provisions by the American Alliance for Equal Rights, which will receive $4.3 million from the settlement. The provisions allow private parties to sue on behalf of the federal government and share in any recovery.