The federal government is inviting thousands of companies to fight the public release of their diversity numbers, even after a judge ruled that the workplace demographics reports shouldn’t be kept secret.
For years, Reveal from The Center for Investigative Reporting has battled in court to make public the diversity reports of companies that get government contracts, so that all journalists and the public can scrutinize the data. We won, but the fight isn’t over.
Some companies – and the federal government – continue to push back against transparency, despite the court loss.
Government contractors must file diversity reports that show their overall workforce by race, gender and job category. Called EEO-1s, the reports offer a starting point for comparing diversity across similar companies and addressing inequality. Contractors, as recipients of taxpayer money to do work for the public, are required to meet a higher standard to guarantee equal opportunity and eliminate discrimination in their employment practices.
The U.S. Department of Labor refused to release most reports to Reveal even after a federal judge ruled in 2019 that the reports weren’t confidential business information. After we threatened to sue again earlier this year, it proactively offered contractors a 30-day window to argue for keeping their diversity data secret instead of releasing the records.
Civil rights activists, members of Congress and scholars have long called for the reports to be made public, and after many years of pressure, an increasing number of companies disclose them voluntarily. Reveal used those voluntary reports in a series of stories quantifying the severe lack of diversity in the tech industry, where less than 2% of professionals at the largest companies were Black or Latina women in 2016. Other news organizations have used the reports to hold companies accountable as well.
But the public still doesn’t know how diverse the workforces are at the majority of companies that contract with the federal government. Reveal has requested diversity reports for all federal contractors from 2016 to 2020.
Jenny Yang, director of the Labor Department’s Office of Federal Contract Compliance Programs, published a notice Aug. 19 that federal contractors have 30 days to object to the release of their diversity reports, giving them the opportunity to block their disclosure. The agency estimates that 15,000 companies could be affected.
Even though a federal judge struck down the department’s previous attempt to keep such records secret, Yang’s notice said the agency “has reason to believe that the information requested may be protected from disclosure” and has “not yet determined” whether it is. The agency set up a portal to accept objections from companies. The portal also made clear who made the request for the records: It names me and links to my bio page.
Reveal has been fighting for the release of diversity reports for five years, through various requests under the Freedom of Information Act, direct requests to companies and legal filings.
When we first requested the reports for Silicon Valley tech companies, several claimed their diversity numbers were trade secrets. Some of them argued that releasing the numbers would hurt their competitive position, leading to a “raiding of minority or female employees” or even “public relations harm.”
The government sided with the companies, but after we sued, it reversed course and released the EEO-1 reports. It turned out companies’ diversity stats were just embarrassing. Palantir, for example, had no female executives at the time and no women of color in management at all – particularly bad representation even for the tech industry.
When we asked for more recent data for the tech companies, the government backtracked, siding again with the companies that argued their diversity numbers were confidential commercial information. So we sued again.
A federal judge eventually ruled that the companies’ objections didn’t hold up, that EEO-1s are not confidential business information and that “the Government was not justified” in withholding them. The Labor Department didn’t appeal the decision. A tech company did, but its appeal failed for procedural reasons.
Now, after years of dragging its feet, the government is sidestepping the court ruling, claiming it’s still not clear whether the records should be public, inviting companies to object and offering them a list of points to address in requesting the government withhold the records.
Reveal general counsel D. Victoria Baranetsky argued in a letter to the agency that inviting companies to object goes against the court opinion and that the agency should publish all of the diversity data online. Baranetsky’s proposal has precedent: The Labor Department published workplace injury data online, without consulting companies, after Reveal won a ruling that the records must be made public. Now that data is being used by other journalists and advocacy groups.
In this case, the agency maintains it has to give companies a chance to object. It could, of course, have started that process more than three years ago when we first requested the data.
Meanwhile, corporate lawyers and consultants who represent contractors are sounding the alarm to their clientele.
“If there is information in your EEO-1 Reports that you would prefer to keep out of your competitors’ hands and the public eye, you should act quickly,” wrote one firm.
“Employers have a number of reasons to fear their EEO-1 data becoming public,” wrote another, including that Reveal “could use the data to call out employers who they believe have underperformed in their diversity efforts, or worse yet, engaged in discrimination.”
A third wrote that the government’s general notice was “woefully inadequate” and that failing to alert each individual company “sets concerning precedent.”
The agency states that it will make an independent evaluation of companies’ objections before deciding whether to disclose their diversity reports. In the past, it has often rubber-stamped those objections.
Years ago, when Reveal requested PayPal’s diversity numbers, the company offered a common objection: “PayPal has taken great care to ensure the confidentiality of its EEO-1 Reports” and releasing them “would cause substantial competitive harm.” The government immediately wrote back that it agreed with PayPal, in a letter dated the same day.
The day after Reveal wrote a story about that, PayPal posted its EEO-1s publicly online, and it continues to do so each year. By the time USA Today asked companies for EEO-1s in 2021, PayPal CEO Dan Schulman had become an advocate for disclosure, saying, “The more transparent we can be as a company, the more we can fix issues and the more we can inspire others to do the same.”
The fact that some companies disclose their numbers without a problem shows that the arguments for secrecy don’t hold up, said Joseph Bryant Jr., who leads the Rainbow PUSH Silicon Valley Diversity Project. The group’s founder, the Rev. Jesse Jackson Sr., has been pressuring tech companies to share their EEO-1 numbers since 2014.
“Whatever the excuse may be has a lot to do with companies not wanting to be caught with their pants down,” Bryant said. “I think there are some companies that are too embarrassed and too lazy to do any better. And it’s easier to deflect than to adjust.”
Asked how the government will handle objections going forward and how the public can trust its determinations, a spokesperson for the Office of Federal Contract Compliance Programs declined to comment.
But one thing is clear: It follows a long pattern of deference to private companies – unless faced with a lawsuit.