DOJ Announces Largest Settlement Yet in Drive to Use the FCA to Target Alleged Employment Discrimination
Earlier this week, the Department of Justice (“DOJ”) announced a $25 million settlement with three Accenture entities to resolve allegations that they violated the FCA by engaging in conduct DOJ alleges violated Title VII and Federal Acquisition Regulation (“FAR”) clause 52.222-26. This is the third settlement—we reported on the first two here and here—reached via DOJ’s Civil Rights Fraud Initiative, which aims to use the FCA to address alleged discrimination by employers that have contracted with the federal government. $11,627,000 of the settlement amount was restitution, suggesting a damages multiplier just above two, which is consistent with the prior two settlements.
DOJ contended that the defendants submitted false claims and false statements to the government by certifying compliance in its federal contracts with Title VII and FAR clause 52.222-26 when they were alleged to be out of compliance, during the period January 1, 2017 through September 14, 2026. The second discrimination-based settlement agreement also reached back to January 1, 2017—perhaps because that was the first day in the month when the first Trump Administration began. The defendants also allegedly sought payment under their federal contracts for costs related to practices that DOJ alleged to be discriminatory. Those practices fell into three categories.
First, the defendants allegedly took race or sex into account when making hiring decisions. The defendants allegedly strove to meet “non-public race and sex-based workforce composition goals” for business units. One defendant’s business unit leaders allegedly received monthly summaries showing the percentage of each race and sex in the unit. And after an initial hiring round allegedly failed to yield sufficient numbers of preferred racial demographics, one defendant allegedly recruited additional employees to make progress toward its demographic goals.
Second, the defendants allegedly took race or sex into account when making promotion decisions. One defendant allegedly strove to ensure that candidates who advanced the defendant’s race and demographic goals received “extra visibility” with the leaders making promotion decisions. The defendant also allegedly created a separate “pipeline” for such candidates and ranked them separately from candidates who did not advance the defendant’s demographic goals.
Third, the defendants allegedly used race or sex to limit eligibility for certain training, partnerships, mentoring, leadership development programs, and educational opportunities or resources. One defendant allegedly ran a training program that aimed to use mentorship and networking to boost the career prospects of certain employees because of their race.
These practices broadly parallel those alleged in DOJ’s first two discrimination-based FCA settlement agreements. All three settlements involved allegations that defendants (1) used race or sex in making hiring and promotion decisions; (2) used demographic goals; and (3) used race or sex to limit eligibility for certain opportunities or resources. Unlike the second discrimination-based settlement, but like the first, no qui tam underlay the allegations (though there was a civil lawsuit that Accenture previously settled with a man who raised gender-based discrimination allegations) and no outside counsel signed for the defendants. The Accenture settlement is notable because interest only began to accrue one day before the defendants signed; interest usually runs from the date of a “handshake” agreement to settle, which is typically earlier in time.
In reaching this settlement, DOJ acknowledged and credited the defendants’ cooperation with the investigation, pursuant to Justice Manual Section 4-4.112—DOJ’s Guidelines for Taking Disclosure, Cooperation and Remediation into Account in False Claims Act Matters.
The settlement agreement provides that the defendants settled to avoid the delay, uncertainty, inconvenience, and expense of litigation, denied the allegations, and did not admit liability.
The settlement agreement is available here.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.
