Is Diversity Data a Trade Secret? | DCR Workforce Blog

Is Diversity Data a Trade Secret?

Five years ago, the San Jose Mercury News kicked off a quest to find out the racial makeup of the workforce at the country’s most important Silicon Valley technology firms.  Google (with 30000 workers and $50 billion revenues) and other tech companies refused to disclose information regarding their workforce composition or their use of diverse suppliers.  When the newspaper’s attempts to access this information failed, CNN joined in the effort, filing a Freedom of Information Act (FOIA) request to gain access to Google’s EEO-1 report, an annual filing required by Federal law which categorizes U.S. workers by their race and sex. CNN reported that Google claimed its diversity data is a trade secret, refused to answer CNN and minority leaders as to the reasons behind their unwillingness to comply, and furthermore, Google asked the Labor Department to block disclosure.  Not surprisingly, this has led to outrage and criticism by many who feel that this information needs to be in the public domain.

The question everyone is asking is WHY?  In what way would the composition of one’s workforce be a trade secret?  What advantage would be gained by competitors if this information were disclosed? A diversity program showcases a commitment to equal opportunity and an inclusive work environment. Companies that work to build a diverse workforce that reflects the demographics of the market they serve report significant competitive advantages, including deeper understanding of buyer preferences and stronger community and employee support.  Again, why would any company choose to withhold this information?

The issue goes beyond disclosure of data regarding regular, ‘permanent’ employees.  Today, U.S. businesses are using a growing number of contingent workers supplied by staffing agencies.  This workforce strategy provides ultimate flexibility in responding to dynamic shifts in the market.  It also gives companies access to ‘hard to find’ skills that may be needed for a limited period of time.  It is not uncommon today for F500 companies to engage thousands of contract workers. However, companies – including staffing agencies who serve as employers of record for temporary workers – are not required to report on these workers in the EEO-1 report.

Contract workers are generally covered under the EEOC’s anti- discrimination statutes as the EEOC clearly recognizes them as the ‘employees’ of the staffing firm.  The EEOC’s Regulations clearly stipulate that staffing firms and their clients to whom the temporary workers are assigned, may not discriminate against the workers on the basis of race, color, religion, sex, national origin, age, or disability or injuries suffered in war.  The guidance also makes it clear that a staffing firm worker assigned to a staffing agency’s client must be treated without discrimination. The staffing firm carries the responsibility to take immediate and appropriate corrective action if it learns that one of its workers was discriminated against by a client. Staffing firms and their clients are responsible for ensuring that the staffing firm workers are paid wages on a non-discriminatory basis.  However, regulations stop short of requiring that staffing firms track or publish information regarding the gender, race or ethnicity of these workers.

Should information on a company’s worker demographics be made public?  Should that information extend to the contract workers on assignment?  Should staffing agencies that, in some cases, employ as many as a quarter of a million workers over the course of a year be required to disclose diversity information on those workers?  Would the availability of this information matter to your company when selecting business partners or vendors?  Let us know what you think.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
An industry veteran, Debra draws on more than 25 years of experience in corporate operations, strategic planning, marketing, sales and management. Her prolific work experience includes service at top computer technology, management consulting, and workforce management companies.