The U.S. Department of Labor has filed a lawsuit accusing a fast-growing Silicon Valley software company of systematically discriminating against Asian job applicants.

Palantir Technologies was co-founded by prominent tech financier Peter Thiel, with backing from an investment arm of the CIA, and was recently valued at $20 billion. The privately held company makes powerful data-analytics software used by U.S. military and intelligence agencies, as well as private industry.

The lawsuit — which comes as Silicon Valley is grappling with broader criticism for a lack of diversity — claims Palantir “routinely eliminated” Asian job candidates during the resume-screening and telephone-interview stages of the company’s hiring process. The claims are based on a statistical analysis conducted by federal officials responsible for making sure government contractors comply with anti-discrimination rules.

Palantir denied the allegations Monday and said it would contest the suit. It argued in a statement that the government’s case “relies on a narrow and flawed statistical analysis relating to three job descriptions from 2010 to 2011.”


A spokeswoman didn’t respond to questions about the ethnic makeup of Palantir’s workforce. But the statement added: “The results of our hiring practices speak for themselves.” Palantir is based in Palo Alto and employs more than 1,800 people.

In recent years, Apple, Google and Facebook have acknowledged that they employ disproportionately low numbers of women, African Americans and Latinos. Hiring figures released by those companies generally show that employees of South and East Asian descent are better represented.

However, Rose Darling, a senior trial attorney for the Labor Department, said the government’s analysis showed a disproportionate number of Asian applicants were rejected by Palantir.

For example, the suit alleges that Asians made up 77% of a pool of more than 730 qualified applicants for the job of quality assurance engineer at Palantir. The company hired one Asian and six non-Asians, according to the Labor Department’s compliance office.


For another position, described as an engineering intern, the lawsuit said there’s a “one in a billion” chance that Palantir’s hiring pattern occurred by chance.

While the analysis involved hiring statistics for 2010 and 2011, Darling said the company hasn’t shown evidence that it has changed its practices since then.

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UPDATES:

5:05 p.m.: This article has been updated with additional comments and analysis.


The original article was published at 4:40 p.m. on Sept. 26.