Instacart Agrees to $5 Million Settlement Over Claims It Discriminated Against US Workers

Smartphone with displayed Instacart logo in this illustration taken on March 25, 2022. Dado Ruvic/Illustration/Reuters

A San Francisco-based online delivery service has agreed to a $5 million settlement with the Justice Department’s Civil Rights Division and the Equal Employment Opportunity Commission, the agencies said Oct. 20.

Investigators allege Instacart intentionally preferred temporary-visa workers by allowing them to apply for positions electronically. The company required mailed applications for positions advertised through Permanent Labor Certification (PERM)—the process employers must use to show they tried to hire U.S. workers before sponsoring temporary visa holders for green card. As a result, many U.S. workers who applied were not considered in a timely manner.

Assistant Attorney General for the Civil Rights Division Harmeet Dhillon said the settlement was the fifteenth reached that the Trump administration had led to “protect U.S. workers” as part of its “Protecting U.S. Workers Initiative.”

“We will not stop fighting for U.S. workers until there is a fair playing field,” she said.

Commission Chair Andrea Lucas said the settlement shows the agency will act when employers place unlawful barriers in front of American workers.

Under the agreement, Instacart will establish a fund of up to $4 million to compensate applicants, as well as those who were deterred from applying between December 2023 to February 2026. A claims administrator will decide who is eligible for back pay and other damages.

The company also agreed to pay $1 million in penalties to the U.S. government. It must publicly post the jobs it plans to fill through the PERM process on its careers website, accept applications electronically, train its staff, update its policies, and allow outside monitoring of its compliance.

The San Francisco-based artificial intelligence company and its subsidiary Statsig Inc. allegedly violated the Immigration and Nationality Act by preferring workers with temporary employment visas. The alleged discrimination took place while the companies recruited through the PERM process.

“It is illegal to discriminate against U.S. workers by preferring temporary visa holders for jobs,” Assistant Attorney General Harmeet K. Dhillon of the Department of Justice’s Civil Rights Division said at the time.

OpenAI failed to advertise the PERM positions on its external job website, despite that being standard practice with other job postings. The company also required applicants for those positions to mail paper applications, while accepting electronic submissions for non-PERM jobs. OpenAI agreed to pay $1.2 million in civil penalties and create a $2 million back-pay fund.

The company allegedly directed American applicants to an internal email account that blocked external messages.

The PERM program allows employers to sponsor temporary visa holders for permanent resident status after performing good-faith recruitment for U.S. workers. But it is illegal for companies to discriminate on the basis of citizenship status or national origin by creating additional burdens for U.S. and American workers.

Since the original launch of the “Protecting U.S. Workers Initiative” during President Donald Trump’s first administration, the department said it has has secured over $34 million in back pay for U.S. workers and obtained over $16 million in civil penalties.