Silicon Valley’s ‘meritocracy’ hides a discriminatory streak

Is it naive to believe that we’re past the days of paying less to people who aren’t white? And would it be too cynical to believe that a manager who stands up for a prospective employee is making a career-busting mistake? Sadly, the answer to both questions appears to be no when we’re talking about Oracle.

Those are heavy charges, and they’re contained in a lawsuit against the company filed this month by Ian Spandow, a former sales manager who claims he was fired for complaining about Oracle’s hiring policies, which he says are “discriminatory.”

[ Bye-bye, boys’ club? Why the new IT may be a woman’s world. | Bill Snyder debunks the H-1B hogwash. | For quick, smart takes on the news you’ll be talking about, check out InfoWorld TechBrief — subscribe today. ]

For the record, Oracle declined my request for comment, and to my knowledge has made no public statements about the case. Spandow and his attorney, Clarice Liu, also did not respond to my requests for comment, so I’m relying on statements made in the suit filed in U.S. District Court in San Francisco.

In a nutshell, Spandow says he tried to hire a very well-qualified Indian for a sales job but was told he could pay the man only $50,000, a sum well below what other new hires for similar positions were offered. That “would be good money for an Indian,” Spandow claims his boss said. When Spandow complained, he was unceremoniously fired.

Why should you care? Silicon Valley sets itself apart from the rest of the economy by claiming that it is transforming the world. It’s not just different — it’s better. Merit and results matter, nothing else.

Or so it claims.

The Valley and the rest of the IT-related industry certainly is a font of innovation, but it also exhibits an anachronistic lack of opportunity for women, African-Americans, and other minorities. What’s more, this bastion of innovation has historically imported large numbers of techies from India and other countries under the flawed H-1B visa program and paid them less than the prevailing wage.

And because unions are practically nonexistent in the Valley, opening one’s mouth about a sensitive subject can mean instant dismissal.

“Good money for an Indian” Spandow, a native of Ireland who was working at Oracle on an L-1 visa, joined the company in 2005, trained hundreds of sales reps and managers, and was quickly promoted. In 2012 he was named a senior regional sales manager. Spandow says he exceed sales quota and won a number of company awards.

In September 2012, Spandow sought approval to transfer an Oracle employee from India to California, saying the man (his name has been withheld from the court filings) had a successful track record during his seven years with the company. That’s when things got weird.

Spandow suggested the man be paid what recent “Caucasian” hires had been offered, but was told he should make a substantially lower offer. “He knows everyone on the team, and will of course, know what they earn within days of arriving,” Spandow then wrote in an email to his boss, Ryan Bambling. “Moreover, he has 6+ years Oracle experience ahead of them.”

The filing alleges that Spandow was rebuked for his complaint and was told to offer the candidate a salary of $50,000, which Spandow described in his email as “nothing short of discriminating against him based on his ethnicity/country of origin.” A fair offer, he says, would have been more than $60,000 a year.

When Spandow raised his concerns with sales director Keith Trudeau, he was again rebuked and allegedly told that the salary offer was “good money for an Indian.” After more complaints and rebukes, he was fired in mid-December.

Spandow says he believes that Oracle has made a practice of underpaying Indian employees and in is in violation of the Civil Rights Act of 1964, and that his firing was illegal retaliation for his complaints.

Yes, Silicon Valley discriminates Silicon Valley thinks of itself as the cutting edge of more than just technology; it fancies itself as a force for social change. But in an era when the United States has elected and re-elected an African-American president, only one in 18 leaders of technology firms are black or Latino, says Laura Weidman Powers, executive director of Code2040, a nonprofit group that is working to open the doors in Silicon Valley for black and Latino engineers.

When Catherine Bracy, who ran the President Barack Obama campaign’s Silicon Valley tech team in 2012, looked at who is getting venture money to start tech companies, she found that in 2010 (the most recent year stats are available) less than 1 percent of founders were African-American and 3 percent of all founding teams were all female.

As to the status of women, high-level and rank-and-file IT staffers are still much more likely to be male, and that probably won’t change any time soon. Women comprise only about 15 percent of students working for a computer science degree in the United States, although they represent more than half of the overall university population, according to statistics compiled by the National Science Foundation in 2010.

What’s more, women who work in IT are less likely to have the highest-paying positions. “What we have is a position gap, not a pay gap,” says Tom Silver, senior vice president of Dice, a large job board for tech workers. In a survey of Dice users that garnered 15,000 responses, the company calculates that “average salaries are equal for male and female tech pros, provided we’re comparing equal levels of experience and education and parallel job titles.”

When it comes to importing lower-paid foreign tech workers under the H-1B visa program, Oracle is no slouch. In 2012, the feds approved 481 requests by Oracle to bring in foreign workers under that program, according to an analysis by Computerworld, an InfoWorld sister publication. Many of those workers are paid less than the prevailing wage, and as I’ve argued, they are used to hold down salaries for the workforce as a whole.

Obviously, there are many well-paid people from India working in Silicon Valley. It’s also possible that Spandow has an agenda and a history that belies his complaint. But given the indisputable facts of discrimination in Silicon Valley, his charges sadly have the ring of truth.

I welcome your comments, tips, and suggestions. Post them here (Add a comment) so that all our readers can share them, or reach me at bill@billsnyder.biz. Follow me on Twitter at BSnyderSF.

This article, “Silicon Valley’s ‘meritocracy’ hides a discriminatory streak,” was originally published by InfoWorld.com. Read more of Bill Snyder’s Tech’s Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.