A lawsuit has been filed against a Silicon Valley tech firm founded by financier Peter Thiel claiming that it systematically discriminates against Asian job applicants.

The US Department of Labor claims Palantir Technologies ‘routinely eliminated’ Asian candidates during its resume-screening and telephone-interview stages of its hiring process.

It follows statistical analysis by federal officials responsible for making sure government contractors comply with anti-discrimination laws.

The company, which was recently valued at $20 billion, makes data-analytics software used by the US military, intelligence and law-enforcement agencies.

It also provides services for banks and insurance companies, and was set up with backing from an investment arm of the CIA.

If it loses the case, it could be made to forfeit its government contracts–which are estimated to be worth around $340 million.

Palantir has denied the allegations and said it will fight the suit, saying the government’s case ‘relies on a narrow and flawed statistical analysis relation to three job descriptions from 2010 to 2011’.

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The lawsuit alleges that Asians made up 77 per cent of more than 730 qualified applicants for a quality assurance engineer post at Palantir.

But the company, the US Department of Labor claims, hired one Asian and six non-Asians.

It said the statistical likelihood of that result is one in 741. The department also claimed there was a ‘one in a billion’ chance of Palantir’s hiring pattern happening by chance, highlighting a position described as an engineering intern.

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While the analysis involved hiring statistics for 2010 and 2011, Labor Department senior trail attorney Rose Darling said the company hasn’t shown evidence that it has changed its practices since then.

Appellate courts have allowed the use of statistical analyses in discrimination claims because it’s rare to find more explicit evidence, like a memo that says ‘Don’t hire’ from a certain group, Lobel said.

‘You used to have ‘smoking guns,’ but that’s more rare these days,’ she said. ‘So the courts are recognizing that you can prove discrimination by showing that the odds that this would be the result, without discrimination, are just so low.’

The lawsuit is the first of its kind brought against a Silicon Valley company in recent years, Darling said. She declined to say if other investigations are pending.

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