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Oracle Could Lose $100 Million Annually in Federal Contracts Over Pay Discrimination Suit

A new Department of Labor complaint alleged that Oracle saved $401 million by underpaying women and minority workers. And that has put $100 million annually the company has in federal contracts into jeopardy.

Oracle had allegedly paid women and non-White workers less than white males for similar jobs and discriminated against Blacks and Hispanics in hiring. Further, the DOL claimed the company directed women and minority employees into lower-level positions and showed “extreme preference” for immigrants holding visas. The department said the practice “lends itself to suppression of that workforce’s wages” because workers would be dependent on Oracle (ORCL) to provide ongoing work authorization to remain in the country, CNBC noted.

The DOL initially filed a discrimination lawsuit in 2017, according to an agency press release. The suit was the result of an investigation that had started in 2014. The DOL said that Oracle had refused to meet “routine requests for employment data and records” and that, as a federal contractor, it is not allowed to engage in “employment discrimination on the basis of race, color, sex, sexual orientation or gender identity or national origin.”

Tuesday’s development was the first estimate of how much in total Oracle had saved by underpaying and restricting the careers of workers. More than 5,000 women were underpaid by as much as 20%, according to reports. More than 11,000 Asian employees saw pay shortages of up to 8%.

The situation threatens an estimated $100 million a year that Oracle gets in federal contracts. The original DOL complaint seeks “an order canceling all of Oracle’s federal government contracts and subcontracts.”