Secretive Silicon Valley firm Palantir is being sued for discriminating against Asians

Palantir CEO Alexander Karp
Palantir CEO Alexander Karp
Image: Reuters/Mike Blake
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Palantir Technologies, the secretive Silicon Valley data analysis company that does work for the FBI and companies like JP Morgan, is being sued by the US Department of Labor for bias against Asian job applicants.

The company “discriminated systematically” in both its hiring process and its referral practices, according to the suit, which was filed today (Sept. 26) before administrative law judges. The government said it tried to resolve the complaint through negotiations before it sued.

The government analyzed Palantir’s hiring to prove statistically that the hiring patterns reflected bias, starting in 2010. For vacant software engineer positions, for example, the company received 1,160 applicants, 85% of whom were Asian. The company hired 25 engineers, including only 11 Asians. “The likelihood that this result occurred according to chance are approximately one in 3.4 million,” the suit states.

Palantir, named after a clairvoyant stone in The Lord of the Rings, was founded in 2004 by CEO Alex Karp and Peter Thiel, the entrepreneur and venture capitalist who cofounded Paypal. Thiel made headlines this year for bank rolling Hulk Hogan’s lawsuit against Gawker and being one of the few business people to speak at the Republican National Convention. Another early backer of Palantir was a venture capital firm established by the CIA.

The company has resisted calls for it to go public, and instead remains “Silicon Valley’s most secretive company,” according to Buzzfeed, which reported on the defection of high-profile clients, such as Coca-Cola, who balked at its high fees and lack of results. Citing confidential material, Buzzfeed said the company is also struggling to retain its staff and raised pay in an effort to stem departures.

In an emailed statement, Palantir said:

We are disappointed that the Department of Labor chose to proceed with an administrative action and firmly deny the allegations.

Despite repeated efforts to highlight the results of our hiring practices, the Department of Labor relies on a narrow and flawed statistical analysis relating to three job descriptions from 2010 to 2011.

We intend to vigorously defend against these allegations

Palantir has federal contracts worth over $340 million, the suit said, and it agreed to adhere to government hiring practices when it signed those contracts. “Federal contractors have an obligation to ensure that their hiring practices and policies are free of all forms of discrimination,” according to a Department of Labor statement.