The Embarrassing Secret Behind These Tech Giants’ Diversity Figures

This story was originally published by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in the San Francisco Bay Area. Learn more at revealnews.org and subscribe to the Reveal podcast, produced with PRX, at revealnews.org/podcast.

Palantir Technologies said it must hide the number of women and people of color it employs so competitors won’t “steal” them.

That’s the argument the data-mining company made to the federal government, blocking release of its diversity statistics for more than a year.

Well, we finally got Palantir’s 2015 diversity numbers through a public records battle with the government. It turns out that Palantir didn’t have such great diversity after all. The company had no female executives and only one woman, who was white, among its managers.

Palantir told the U.S. Department of Labor, in a letter it also tried to keep secret, that “competitors could identify where Palantir has made significant progress in hiring women and minorities and target recruitment strategies at specific job categories to steal this talent from Palantir.”

But Palantir doesn’t compare well, even in an industry infamous for its lack of diversity. Of the biggest tech companies in Silicon Valley, only 10 other companies had no female executives in 2015. That’s out of 167 of the largest tech companies in the San Francisco Bay Area, according to an analysis by Reveal from The Center for Investigative Reporting and the Center for Employment Equity. The company was in the bottom four for its percentage of female managers and the only one that had no women of color in management.

Co-founded by billionaire Peter Thiel, Palantir has won hundreds of millions of dollars in government contracts, drawing controversy for helping law enforcement track citizens, predict crime and target immigrants. Firms with government contracts are overseen by the Labor Department’s anti-discrimination arm, making their diversity reports subject to public records requests.

Reveal filed Freedom of Information Act requests for many tech firms’ EEO-1 reports, which show a company’s workforce broken down by race, gender and broad job category. The Labor Department initially let the companies block the release of the numbers – as is its longtime policy – but reversed course and coughed up the data after we sued.

It’s all part of our project providing the most detailed look at the lack of diversity in Silicon Valley. We showed how companies that are designing and defining the future have by and large left out women and people of color, especially in leadership. But while some companies have particularly dramatic disparities, others have shown that greater diversity is possible.

Interested in crunching the numbers for a project of your own? All of our Silicon Valley diversity data, including the newly released data, can be found here.

Tech companies are transforming the San Francisco Bay Area but are far from reflecting its diversity. Pandora Media, for example, is headquartered in Oakland, where about 26 percent of the population was black in 2015, but only 3.5 percent of the company’s workforce was black.

Because we sued, we also got the letters tech companies used to argue that their diversity numbers are trade secrets that must be protected. Keep in mind that the government actually went along with these arguments – until we pushed back.

Here’s a rundown of some of the excuses:

“A very real threat”

Oracle argued that “there is a very real threat to its competitive position” if its workforce diversity were to be exposed. Any such advantage to a competitor, Oracle argued, “may have a very significant and detrimental impact on Oracle’s business.”

So watch out, investors – the competitive positions of Oracle, Palantir and Pandora are about to take a big hit. That’s if you believe the companies’ arguments that releasing their diversity numbers will cause “substantial competitive harm.”

Thanks to our lawsuit, we now know that just under 13 percent of Oracle’s executives in 2015 were women, including co-CEO Safra Catz. Two-thirds of major Silicon Valley companies had a better representation of female executives that year. And like Palantir, Oracle’s workforce was 90 percent white and Asian.

“Public relations harm”

Most companies wouldn’t admit that what they’re really afraid of is bad press. But Synnex, an information technology services company, wasn’t above that argument, citing potential “public relations harm” if its diversity reports were released.

An official government report, the company wisely noted, is tougher to deny.

“Any unwarranted assertions made against the Company would be harder to refute if they are somehow tied to an official document such as the EEO-1 Report,” Synnex’s letter states. “For example, a newspaper doing an exposé or plaintiffs seeking a basis for class certification in litigation could seek to negatively characterize the work environment as unfriendly toward minorities or females based on selective interpretation of data (and without further evidence).”

Perhaps after realizing that its numbers aren’t as bad as many other tech companies’ numbers, Synnex more recently dropped its objections.

“Raiding of minority or female employees”

Oracle and Pandora both warned that revealing their diversity numbers would lead to “raiding of minority or female employees.”

“Losing highly talented diverse staff would be a costly and huge competitive disadvantage to Oracle,” its letter states. “This result is very likely given the level of talent of Oracle’s employees and the competitive nature of the high technology industry.”

The competition probably wouldn’t find many women of color who are executives at Oracle to target. The software giant had only one – an Asian woman – among 103 executives in 2015.

Pandora also warned that its competitors would “identify key minority or female Pandora employees and poach them.”

Nearly half of Pandora’s workforce was female in 2015, which was way more than most large technology companies. However, that drops to just under 24 percent at the executive level. And it had just three women of color among 76 executives.

Pandora overall was whiter than half of its 167 peers, at 68 percent, and its executives were 89 percent white.

In any case, the arguments for secrecy are “just terrible excuses,” said Leslie Miley, an engineering leader and diversity advocate who has held engineering management positions at Slack, Twitter, Google and Apple.

“If you’re so worried about retention, do something to keep the people – don’t hide them,” Miley said. “There’s no good look here.”

Pandora recently gave up its stated fear of diversity-raiding. After learning that the government was going to give up its information anyway, the music-streaming company committed to Reveal to release its 2017 EEO-1 report later in 2018. Then, it said it would share the report in early 2019. Tick tock, Pandora!

“Single digits”

The EEO-1 forms include only statistics about diversity – without employee names. But Oracle and Pandora saw peril in the numbers, especially in positions with very few people of color.

“Where numbers in the categories are in the single digits, individuals may be discernible,” Oracle’s letter states. “Where there is only one person in a given category, especially if the individual is an Executive/Senior Level Official or Manager, it is very easy to deduce the person’s identity.”

Oracle said it worried this could violate employees’ right to privacy.

Oracle helpfully cited the example that it had only two black men among its 103 executives in 2015. Pandora, for its part, points out that it had only one Latino man and two Latina women among 76 executives.

But there’s a much easier way to identify employees of color than using EEO-1 reports, said Y-Vonne Hutchinson, CEO of ReadySet, a diversity solutions firm in Oakland.

“You could literally just log in to LinkedIn and find out,” she said. “It’s far more likely that what they’re actually concerned about is that their numbers are disappointing.”

“An inclusive work environment”

Tech companies argued in their letters that they already had prioritized diversity.

Palantir and Gilead Sciences both stated that workforce diversity is more to them “than just a legal concept; it is a business imperative.” The companies used the same lawyer to make the arguments, so a lot of the language is identical.

But while Gilead’s letter states that “we believe in an inclusive work environment,” sandwiched between identical passages, Palantir didn’t include that part.

Gilead and Palantir have very different workforces. At Gilead, more than half of its professional staff were women, compared with 23 percent at Palantir. Indeed, we’ve found that some companies with the most diverse numbers in Silicon Valley also have been hiding.

“A competitive advantage”

Many of these companies’ competitors already release their EEO-1 diversity numbers publicly.

Pandora, for example, names seven other tech companies in its objection letter, citing fierce competition for talent. Six of them – Apple, Facebook, Uber, Google, Amazon and Salesforce – post their EEO-1 forms online.

Oracle lists 11 major competitors in government filings. Eight of them – Amazon, Microsoft, Intel, Cisco Systems, Adobe, Google, Hewlett Packard Enterprise and Salesforce – publish their EEO-1 reports.

Oracle and Pandora claim their rivals could use the numbers to glean valuable insights into their “workforce strategy.”

“Allowing Oracle’s competitors to grow and restructure with the help of the Requested Information would give them a competitive advantage,” the company’s letter states.

So did hiding their diversity numbers for so long give Pandora and Oracle an unfair advantage against more transparent rivals? We asked, but neither Pandora nor Oracle responded to that question.

“Employees may be reluctant”

Palantir and Gilead warned the government that releasing these numbers would threaten the very integrity of the data. Their employees, they claimed, may worry that their personal information would somehow be disclosed and “may be reluctant” or refuse to self-report their gender and race – thereby skewing the data.

It doesn’t matter that that’s an unrealistic concern, according to the companies: “And while the likelihood of anyone’s personal identity becoming discernable from EEO-1 data may be remote, the perception of the employee is what matters in this context.”

Yet it’s often women and employees of color who are at the forefront of transparency initiatives, pushing their employers to disclose more information – from salary disparities to retention data – not less.

“Business sensitive”

Grant Bassett, Splunk’s vice president of global talent acquisition, diversity and inclusion, declared under penalty of perjury that the company’s EEO-1 reports “contain information that is business sensitive, and, if released, would likely result in substantial competitive injury to Splunk.”

But Splunk has faced a different public disclosure that actually hit the software company’s bottom line: a $2.7 million settlement in 2017 to resolve the Labor Department’s allegations that it discriminated against qualified black and Asian job applicants.

Splunk had no black executives or black women in management, and under 2 percent of its workforce was black. But in Silicon Valley, that’s not uncommon. Dozens of tech companies had similar numbers.

What other big tech companies has the government accused of hiring discrimination? Palantir, which settled for $1.7 million, and Oracle, which still is fighting the case.

Beyond EEO-1s to pay disparities

The gender and racial breakdowns that EEO-1s provide aren’t the only way to measure diversity and equality. What about pay?

The Trump administration killed an Obama-era rule that would have required companies to report pay disparities to the government. And Oracle, accused by the Labor Department of paying white men more than their counterparts, shot down a shareholder proposal to do a gender pay gap audit.

But in the United Kingdom, companies now are required to put out a public report on their gender pay gaps. That includes international tech companies such as Oracle.

And not all company officials think that’s a bad thing. Take it from Andy Campbell, Oracle’s director of human capital management strategy:

“A major roadblock to improvement has been a lack of accountability for employers,” he wrote on Oracle’s U.K. website. “Forcing companies to be more transparent about how they treat male and female workers puts more power in the hands of employees, who increasingly want to work somewhere that shares their value system and will be drawn to an equal opportunity organization.”

One battle in a longer war

The Labor Department so far has turned over only 2015 data for these companies – the most recent that was available when we filed our original FOIA requests in 2017. (That’s how long it took to pry this information loose.) So far, the same tech firms – and the Labor Department – have a blocked our year-old request for 2016 diversity data – except Synnex, which saw the light.

The federal government now agrees with us that these are public records but still is holding them back. We’ll keep fighting to liberate more recent data.

Editor’s note: Journalism organizations have their own problems with diversity. We don’t file an EEO-1 report because we have fewer than 100 employees, but we provided our diversity numbers for an industry survey. (Type in “Center for Investigative Reporting/California Watch” in the search box to see our numbers and how we compare with others in the industry.) They were compiled as part of a survey by the American Society of News Editors on race and gender in the newsroom.