The U.S. Department of Labor has concluded the Caterpillar hiring discrimination lawsuit with an agreement that states the manufacturing company will pay $800,000 in back wages and interest to affected job applicants. Caterpillar’s racial discrimination case was centered around a facility in Decatur, Illinois where a routine review had found evidence of discrimination against black workers who had applied for an open position. The law violation occurred during a hiring cycle between 2018 and 2020 and has finally been resolved with Caterpillar’s $800K settlement.
Caterpillar’s racial hiring case is a significant win for affected workers, a number big enough to dissuade the company from such practices in the future. Many are tempted to think that discriminatory actions have been left in the past but such incidents serve as a reminder of their very active presence in the modern world.
Image: Caterpillar, Inc.
Caterpillar’s Hiring Discrimination Affected Over 60 Aspiring Applicants
The Caterpillar-DOL racial case came to light during a routine compliance review by the department’s Office of the Federal Contract Compliance Programs, or the OFCCP for short. They found evidence of Caterpillar’s racial discrimination when they went through applications for fabrication specialist/welder positions at the Decatur facility between March 30, 2018, and March 30, 2020, according to the DOL’s press release. The OFCCP “enforces Executive Order 11246 which prohibits federal contractors from discriminating in employment based on race, sex, color, religion, sexual orientation, gender identity or national origin,” according to the release notes.
Caterpillar is an important contractor of the U.S. Department of the Army and has held more than $481 million USD in federal contracts, which makes their disregard for federal proceedings stand out even more. Still, Caterpillar is not challenging the hiring discrimination allegations and has agreed to adhere to the Department of Labor’s corrective measures.
The company’s statement to HRDive mentions, “While the agency has not issued any violations against us, we have signed an early conciliation agreement to resolve their questions. The questions raised and the conciliation agreement is not a reflection of the current state of our hiring practices, and Caterpillar remains committed to creating a workforce that respects and celebrates diverse backgrounds, experiences, and perspectives.”
Caterpillar Has Faced Several Issues With Government Forces in the Past
Caterpillar’s $800K settlement will be paid out as back wages to affected job applicants and the company also has to offer jobs to 34 eligible class members. The Caterpillar hiring discrimination case is not the company’s first conflict with the law. In 2011, the heavy equipment manufacturing firm had to pay a $2.55 million USD penalty after its violation of the Clean Air Act for “shipping more than 590,000 highway and non-road diesel engines without the correct emissions controls,” according to the U.S. Environmental Protection Agency (EPA).
More recently, a Caterpillar subsidiary Solar Turbines, Inc. was accused of unfair labor practices and had to pay up to $1.8 million USD to be distributed among a group of employees. The company also reached a $740 million settlement with the IRS in 2022, and in 2024, a jury convicted the company of “unlawfully interfering with a key sales agreement and driving it (importer) out of business,” according to Reuters. The conviction resulted in a $100 million USD settlement.
Despite these reports, the company’s website states they were on the list of Forbes’ Best Employers for Diversity in 2024 and Newsweeks’ award for America’s Greatest Workplaces for Diversity in 2024. They also state “Our three-pillar D&I Framework outlines our strategic approach to diversity and inclusion. The objective of the framework is to weave D&I seamlessly into the business, ensuring that the principles guide us in our daily operating rhythm.” The company appears to have policies in place to support its DEI commitments, however, sections of the business appear to have been left out from the uniform adoption of these principles.
Caterpillar DOL Racial Case Highlights the Importance of Good Hiring Practices
Caterpillar’s racial bias in hiring practices is eye-opening and makes it quite evident why we need DEI policies to become an integral component of every workplace practice rather than just a buzzword. Some will take this case to mean that they need to improve how they evade federal powers and the settlements that they bring with it, but that isn’t what we mean by learning from Caterpillar’s $800K settlement. The money could have been better spent improving internal hiring policies and training recruiters to hire according to skill, not background.
In 2023, the Pew Research Center found that among Black workers, 48 percent of men and 36 percent of women have experienced discriminatory or unfair treatment from employers due to race. Discriminating against willing workers hurts the community as a whole and eliminates an organization’s access to a very vast talent pool that is willing to work. Reviewing and renewing hiring practices regularly is something that every organization must take seriously.
Additionally, the Caterpillar hiring discrimination case ends with a settlement and instructions to hire eligible workers onto the team but this may not be sufficient enough to guarantee a safe work environment for these employees. Workers who are not hired willingly are prone to facing a hostile environment that prevents them from performing their tasks to the best of their abilities, significantly damaging their mental peace. Diversity in hiring is not sufficient to guarantee a diverse work environment and employers need to carefully consider how their work culture needs to be updated just like the rest of the organization.
