The Office of Federal Contract Compliance Programs and Palantir Technologies, a California-based technology company, have agreed to settle a pending lawsuit for about $1.7 million.

We first reported on this case in October 2016. In its complaint, the OFCCP alleged that the Company used a discriminatory hiring process that resulted in a low selection rate for Asians, who made up 73 percent to 85 percent of applicants for certain engineering positions. Palantir denied that it engaged in any unlawful discrimination, and contended that the OFCCP’s statistical analysis was “flawed” and “illogical.” The company noted that at least 37 percent of its engineering team based in the United States was Asian, which is above the nationwide availability percentage. The OFCCP, however, was clearly not persuaded by the company’s overall commitment to diversity, and instead focused on one statistical anomaly.

Under the settlement, Palantir will pay $1,659,434 to 1,558 Asian job applicants and will extend job offers to eight applicants as positions become available.

This settlement highlights the importance of conducting adverse impact analysis of all employment activity on an annual basis. Because this is one area that carries with it the potential for monetary damages, federal contractors and subcontractors should routinely examine their processes and outcomes to identify any areas of concern before an OFCCP audit occurs.