There’s a scene near the beginning of The Usual Suspects in which the police are interrogating a series of ne’er-do-wells about a recent robbery in Queens. To induce a confession, the police tell one of the suspects (played by the amazing Kevin Pollak) that they can place him in Queens on the night of the robbery. “I live in Queens,” Pollak replies, “Did you put that together yourself, Einstein? What, do you got a team of monkeys working around the clock on this?”
I had a similar reaction when I heard about the discrimination case filed by the U.S. Labor Department against Palantir, a tech company that does data analysis for the government on counterterrorism. The suit alleges Palantir discriminates against Asians in hiring. The allegations, however, do not involve evidence of intentional bias, but instead are based on statistics. For example, the complaint alleges that in hiring software engineers, “from a pool of more than 1,160 qualified applicants – approximately 85% of whom were Asian – Palantir hired 14 non-Asian applicants and only 11 Asian applicants. The adverse impact calculated by the OFCCP [Office of Federal Contract Compliance Programs] exceeds five standard deviations. The likelihood that this result occurred according to chance is approximately one in 3.4 million.”
That’s right. Palantir does not select its employees based on random chance. Who does? Does the Labor Department randomly select its employees out of everyone who applied and met the minimum qualifications? (If so, that might explain some things).
As it turns out, though, the feds have a defense for making this ridiculous argument: the law itself is ridiculous. Anti-discrimination laws started as a noble attempt to stamp out intentional discrimination based on categories like race and sex. However, application of the law has evolved over the years to the point that businesses sometimes have to discriminate intentionally in order to comply. As a federal contractor, Palantir is especially vulnerable to whatever schemes executive bureaucrats come up with.
In particular, adverse-impact claims do not require discriminatory intent on the part of employers. Instead, companies may be in violation merely if their hiring deviates significantly from what selection by random chance would dictate. The fact that no one actually does their hiring that way is legally irrelevant.
The complaint singles out Palantir’s employee-referral system, as well as its “four-phase hiring process in which Asian applicants were routinely eliminated during the resume screen and telephone interview phases despite being as qualified as white applicants.” One might have thought that resume screens and telephone interviews were way to determine whether one candidate really was as qualified as another. But as Charles Dickens said in another context: the law is a ass.
Because even ordinary job-hiring practices can become illegal if they don’t cleave to a statistical ideal, companies that want to avoid the taint of being labeled a discriminator end up having to pay for data collection and statistical analyses to make sure they don’t run afoul of the law (failure to collect relevant data is considered evidence that an adverse impact exists). Given the wide variety of hiring practices that could result in adverse impacts, whether a particular company or contractor is found to have violated the law may depend on whether it happens to fall under the scrutiny of federal regulators.
Speaking of which, Palantir is partly owned and was founded by Peter Thiel, a venture capitalist and author who has been outspoken in favor of conservative causes and Republican candidates. I have not calculated the likelihood that, of all federal contractors, Palantir should purely by chance be subjected to such scrutiny. Maybe someone should.
Josiah Neeley is Texas Director at the R Street Institute.