NASHVILLE, Tenn. (WKRN) — Tennessee’s Attorney General has opened a civil investigation into Deloitte — one of the state’s largest contractors — to determine whether some of the company’s diversity and hiring policies violate federal civil rights law.
Deloitte, part of the “Big Four” accounting firms, manages TennCare’s eligibility system. It’s a contract worth hundreds of millions of dollars, including more than $160 million in state taxpayer funding, according to public records.
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“The state is testing whether any past practices crossed the line under civil-rights law,” Brandon Smith, partner at Holtzman Vogel and former Chief of Staff for Tennessee Attorney General Jonathan Skrmetti, said. “The document requests aim to see how policies were actually put into practice.”
Investigators are examining whether the company set goals for hiring employees of certain races or genders, and if so, whether managers took steps to meet those goals in ways that could cross legal lines.
The Attorney General’s Office has requested Deloitte’s emails, hiring records and policy documents dating as far back as 2022.
“They’re going to look to see if the employer had certain numerical targets of the number of Black people they wanted, number of Latino people they wanted, and then they are going to look to see what the employer did to try to meet those targets,” Brian Fitzpatrick, a professor at Vanderbilt Law School and best known for his empirical studies on class action litigation, said. “Did they say, ‘Let’s only interview Black people this year?’ Did they say, ‘Let’s only interview Latino people this year?’ If they did, then they could be in some big trouble.”
The probe comes in the wake of the U.S. Supreme Court’s 2023 decision ending race-conscious college admissions. That ruling has since fueled a wave of challenges to corporate diversity, equity and inclusion programs. Several states, including Tennessee, have warned Fortune 100 companies not to consider race or gender in employment decisions.
“A lot of employers were using race when they shouldn’t have been, but no one was suing about it, so they got away with it for a long time,” Fitzpatrick said. “After the Supreme Court said we are taking away the exception for universities, people started suing employers. Now, employers are finding themselves in a tough spot.”
This year, the White House issued an executive order limiting DEI requirements for federal contractors. Soon after, Deloitte announced in February that it would scale back its DEI programming.
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“Corporations can no longer implement these policies,” Smith said. “They have to look at them closely and make sure they are staying at the right side of the law. Policies can promote inclusion without being illegal.”
For now, Tennessee’s document probe is not a lawsuit. If investigators determine Deloitte’s practices violated the law, the case could move from a records probe to litigation and potentially reshape how major contractors approach diversity initiatives.
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