Jessica Guynn

USA TODAY

SAN FRANCISCO — Palantir Technologies has settled a hiring discrimination lawsuit brought by the Department of Labor and will pay nearly $1.7 million in back pay and other compensation to Asian job applicants and offer jobs to eight people whose applications were rejected.

Last fall the Department of Labor's Office of Federal Contract Compliance Programs charged the Palo Alto, Calif., company with systemic hiring discrimination against Asian applicants for engineering positions. Palantir fired back, saying the federal government misinterpreted the hiring data.

In a statement Tuesday, Palantir said it disagreed with the allegations. "We settled this matter, without any admission of liability, in order to focus on our work," the company said. "We continue to stand by our employment record and are glad to have resolved this case."

The lawsuit drew headlines in Silicon Valley, where Asians are well represented in the tech workforce while women, blacks and Hispanics are not.

The lawsuit stems from a compliance review by the OFCCP that found that starting in January 2010, Palantir's hiring practices routinely discriminated against Asian applicants for software engineering jobs. Asian applicants were routinely eliminated in the resume screening and telephone interview phases of hiring despite being as qualified as white applicants, the Labor Department alleged.

“We appreciate Palantir working with us to resolve these issues,” said OFCCP Acting Director Thomas Dowd.

As a federal government contractor that provides software and data analysis to the FBI, the U.S. Special Operations Command and the Army, Palantir is barred from discriminating based on race, color, religion, sex, sexual orientation, gender identity, national origin, disability or against military veterans.

The Labor Department said it filed the administrative lawsuit after being unable to resolve the case with Palantir. At risk were Palantir's existing government contracts. It could also have been barred from future federal contracts.