KPMG offices in Washington, D.C. (Photo: Diego M. Radzinschi)

KPMG agreed this week to pay $420,000 to resolve a federal investigation that found the company discriminated against Asian job applicants at a New Jersey facility, part of the years-long scrutiny over the accounting firm's practices for alleged discrimination in separate cases.

The U.S. Department of Labor's Office of Federal Contract Compliance Programs found that the Netherlands-based accounting firm discriminated against 60 Asian applicants for position at its facility in Short Hills, New Jersey, after it launched an investigation between 2011 and 2013.

The company, among the four largest accounting firms in the world, has more than $14 million in contracts with federal agencies, including the U.S. Department of Energy, the U.S. Department of Housing and Urban Development, NASA and the IRS. Those contracts allow it to fall under the purview of the Labor Department's contract compliance office, which brings claims of workplace equity and discrimination against federal contractors.

The Labor Department in April settled a high-profile case with Palantir Technologies, the data analytics startup, based on claims that hiring practices discriminated against Asian applicants. The Palo Alto-based tech firm agreed to pay more than $1.6 million.

President Donald Trump's preliminary budget proposes merging the Office of Federal Contract Compliance Programs, or OFCCP, with the U.S. Equal Employment Opportunity Commission, which sparked complaints from more than 70 civil rights groups to Labor Secretary Alexander Acosta, Office of Management and Budget director Mick Mulvaney and congressional leadership. The groups argued the merger would mean losing key civil rights protections for working people.

“The OFCCP plays a unique and crucial role in ensuring that federal contractors do their part to improve diversity and pay equity in the workplace and proactively promote employment opportunities for underrepresented groups,” said Judy Conti, federal advocacy coordinator with the National Employment Law Project. “We absolutely need a strong OFCCP that's separate from the EEOC.”

In a hearing before a House appropriations committee this week, Acosta assured legislators that the offices would retain its functions and the merger simply was a way to streamline the process. The Labor Department's contract compliance office can proactively monitor workplace diversity and pay equity and the EEOC typically responds to complaints.

Under the KPMG settlement agreement, the company did not acknowledge liability but agreed to the settlement amount for back pay, interest and benefits to the affected applicants. The company also agreed to provide job opportunities to six of the applicants as positions become available and further “will take steps to ensure its personnel practices, including record-keeping and internal auditing procedures, meet legal requirements,” according to a Department of Labor statement.

KPMG also faces a class action filed in 2011, currently pending in the U.S. District Court for the Southern District of New York, that accuses the firm of systematic gender discrimination in pay and promotion, discrimination based on pregnancy and failure to investigate complaints of harassment. A New York judge agreed to let about 9,000 women from around the country join the claims in the case. Attorneys said about 1,100 women, current and former employees, have joined the challenge claiming unfair compensation.

The most recent complaint argues that, “as one of the 'Big Four' accounting firms, KPMG is part of an elite cadre of accountancy and professional services firms that help set industry standards. But rather than use its vast resources and status to stamp out gender discrimination, KPMG actively perpetuates it.”

Peter Hughes at Ogletree, Deakins, Nash, Smoak & Stewart, Colleen Kenney at Sidley Austin and Steven Moore at Constangy, Brooks, Smith & Prophete represent KPMG in the pending New York case. The attorneys did not respond to requests for comment Friday.

KPMG's attorneys rejected the long litany of allegations against the firm in a lengthy response last year to the lawsuit.

“KPMG denies that gender or any impermissible factor played any role in any of KPMG's various performance, promotion or compensation policies, procedures, decisions or practices, or in any other policy, procedure, decision or practice that plaintiffs are or may be challenging,” the company's lawyers wrote.

Kate Mueting, a partner with Sanford Heisler Sharp, said the number of women who have signed onto the case is very high for such cases, indicating the widespread problem at the company. She said the case could have ripple effects on the industry.

Attorneys from Sanford Heisler and Lieff Cabraser Heimann & Bernstein represent the plaintiffs in the case.

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