Caterpillar to pay $800K after federal investigation finds racial discrimination in hiring (2024)

DECATUR — Caterpillar Inc. has agreed to pay $800,000 in back wages and interest and offer jobs to 34 Black applicants after a federal investigation said they were denied employment opportunities at the firm’s Decatur factory because of racial discrimination.

The “conciliation agreement” to correct "alleged systemic hiring discrimination" was announced by the U.S. Department of Labor on Tuesday.

“The company also agreed to ensure its hiring policies and procedures are free from discrimination and provide training to all managers, supervisors and other company officials who oversee hiring decisions,” the Department of Labor said in a news release.

A probe into hiring practices at the Decatur plant, which produces the world’s biggest off-road mining trucks among other products, was launched after a “routine compliance review.”

Caterpillar released a statement saying it had "fully cooperated" with the federal investigation into its hiring practices. "While the agency has not issued any violations against us, we have signed an early conciliation agreement to resolve their questions," the statement added.

"The questions raised and the conciliation agreement are 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."

The firm’s approach to recruiting new employees is subject to federal scrutiny because it has contracts to provide machinery for the U.S. Army and, since 2018, has held more than $481 million in government contracts.

The Department of Labor’s Office of the Federal Contract Compliance Programs (OFCCP) said it found Caterpillar had discriminated against a total of 60 Black applicants. They had applied for fabrication specialist/welder positions at the Decatur factory from March of 2018 through March of 2020.

The OFCCP enforces a rule called Executive Order 11246 which prohibits federal contractors from employment discrimination based on race, sex, color, religion, sexual orientation, gender identity or national origin.

“Over the past 58 years, OFCCP has helped define and defend equal employment opportunity in the American workplace,” said OFCCP Acting Director Michele Hodge.

“Companies that accept federal contracts must monitor their hiring processes to ensure applicants are not rejected based on unlawful practices.”

And OFCCP Regional Director Carmen Navarro in Chicago also welcomed the agreement with Caterpillar: “This agreement provides meaningful compensation and job opportunities to affected individuals and aims to ensure that all applicants, irrespective of their race, are considered equally for employment,” Navarro said.

The conciliation agreement with Caterpillar was one of four announced Tuesday with companies that also included G.E. Aerospace and US Foods, Inc. The amount of back pay and interest in the Caterpillar agreement was by far the largest, however, with the next biggest being a $443,000 payment from G.E. Aerospace.