Virginia-based IT company Arthur Grand Technologies’ settlements with the Department of Justice (DOJ) and Department of Labor (DOL) regarding a discriminatory “whites only” job posting offer key takeaways regarding company liability and reputation risks.

Arthur Grand was assessed a $7,500 penalty by the DOJ and agreed to pay $31,000 in compensation to individuals who filed complaints with the DOL regarding the posting, which was advertised on Indeed in April 2023. The agencies opened their investigations shortly after, determining the company discriminated based on citizenship status and national origin.

Of note, Arthur Grand “asserted that the posted advertisement was generated by a disgruntled recruiter in India and was intended to embarrass the company,” the DOJ said in its settlement agreement. The company has maintained this story in subsequent statements, reiterating the posting was not authorized and noting the rogue employee was promptly terminated.

Whether the company could prove its story was not addressed in the agreement, which it reached without admitting guilt. Regardless, the optics of the matter are damning—especially for a government contractor.

“It is shameful that in the 21st century, we continue to see employers using ‘whites only’ and ‘only U.S. born’ job postings to lock out otherwise eligible job candidates of color,” said Assistant Attorney General Kristen Clarke of the DOJ’s Civil Rights Division in a May 23 press release. “I share the public’s outrage at Arthur Grand’s appalling and discriminatory ban on job candidates based on citizenship status, national origin, color, and race.”

The DOL’s settlement agreement added the company failed to maintain and/or have available records showing the gender, race, and ethnicity of job applicants as required.

The case’s lessons are familiar:

  1. Companies remain responsible for the actions of their employees and must put in checks to supervise certain public-facing actions.
  2. Reputational damage often far exceeds enforcement-related penalties.
  3. Government investigations are likely to uncover additional procedural failures related to the matter at hand.

Arthur Grand agreed to remedy the alleged deficiencies, revise its employment policies, and train personnel on the requirements of the Immigration and Nationality Act.