On October 16, 2026, the U.S. Department of Justice (DOJ) and the U.S. Department of Labor (DOL) announced a settlement with Cloudera, Inc., resolving allegations that the technology company discriminated against U.S. workers during recruitment for positions connected to the Permanent Labor Certification (PERM) program. The resolution includes a two-year PERM debarment, $600,000 in civil penalties, and a $1.4 million fund for back pay to eligible U.S. workers. It also imposes extensive compliance, monitoring, and reporting obligations. (DOJ announcement)

This settlement marks an important development in the government’s enforcement of PERM recruitment requirements and the prohibition against unlawful citizenship-status discrimination. It also demonstrates how deficiencies in the recruitment process can lead to consequences extending well beyond an individual labor certification application.

As discussed in our previous article, PERM Labor Certification Compliance: DOJ Enforcement Trends, Key Risks, and Employer Best Practices, employers must navigate both DOL’s PERM requirements and the separate legal obligations governing fair recruitment and hiring. The Cloudera settlement reinforces the importance of treating PERM recruitment as a genuine hiring process, supported by effective procedures and meaningful consideration of qualified U.S. workers.

Background: How the Cloudera Case Developed

Cloudera, a data management company headquartered in Santa Clara, California, became the subject of a DOJ investigation into its recruitment practices for positions associated with PERM sponsorship.

According to the government’s findings described in the settlement agreement, Cloudera departed from its standard recruitment procedures when recruiting for PERM-related positions intended for employees holding temporary work visas. Rather than posting these positions on its public careers website and accepting applications through its usual online system, the company used a separate process for U.S. workers.

The company established a dedicated email address for applications to PERM-related positions. However, that email account could not receive messages from external email accounts. Consequently, U.S. workers who followed the application instructions were unable to submit their applications successfully and were not considered for the positions. The DOJ’s investigation identified at least one affected U.S. worker.

The government determined that there was reasonable cause to believe that Cloudera had engaged in a pattern or practice of citizenship-status discrimination in PERM-related recruitment between approximately March 31, 2024, and January 28, 2025.

In April 2026, the DOJ filed a complaint alleging violations of the Immigration and Nationality Act (INA), which prohibits certain forms of discrimination based on citizenship status in hiring and recruitment. In May 2026, the DOL separately suspended processing of PERM applications filed by or on behalf of Cloudera for 180 days.

Cloudera denied the allegations and maintained that it had complied with the law and acted without discriminatory intent. The settlement resolves the litigation without further proceedings and establishes obligations governing the company’s future PERM-related activities.

The Settlement: Two-Year PERM Debarment, Financial Penalties, & Compliance Obligations

The October 2026 resolution brings together enforcement measures from both the DOJ and the DOL. The consequences extend beyond monetary payments and include restrictions on PERM participation, independent oversight, and mandatory changes to recruitment procedures.

1. Two-year prohibition on PERM participation

One of the most consequential terms is Cloudera’s agreement to withdraw outstanding PERM applications that relied on recruitment referencing the nonfunctional email address and to refrain from participating in the PERM program for 24 months.

During this period, Cloudera may not file ETA Form 9089 applications or place advertisements related to PERM recruitment. Under the agreement, the 24-month period begins on the date of the company’s most recent PERM application withdrawal.

This restriction is particularly significant because it directly affects the employer’s ability to pursue permanent labor certification for sponsored employees. A PERM debarment can disrupt green card sponsorship plans and require employers to reassess their immigration strategies and timelines.

The Cloudera resolution also demonstrates that enforcement measures may affect an employer’s PERM program as a whole, rather than being limited to the particular applications or recruitment activities that gave rise to the investigation.

2. $600,000 in civil penalties and a $1.4 million back-pay fund

The settlement requires Cloudera to pay $600,000 in civil penalties to the U.S. Treasury and establish a $1.4 million fund to compensate eligible U.S. workers who were harmed by the alleged discriminatory recruitment practices.

The back-pay fund is intended to compensate qualifying individuals who attempted to apply for the affected positions but were not given fair consideration. The DOJ will determine eligibility and calculate compensation based on factors that include the wages and other remuneration an individual would have earned, mitigation of lost earnings, and reasonable interest.

The agreement establishes a process through which potentially eligible individuals may contact the DOJ’s Immigrant and Employee Rights Section (IER) and submit evidence of their claims within the specified period.

Together, the civil penalty and back-pay fund total $2 million. These amounts are separate from the operational costs associated with revising policies, training personnel, retaining an independent auditor, and complying with ongoing oversight requirements.

3. Mandatory recruitment policy changes

The settlement requires Cloudera to develop a written PERM recruitment policy and submit it to the DOJ for review. The policy must establish procedures designed to prevent citizenship-status discrimination and ensure that PERM-related recruitment is conducted consistently with recruitment for comparable non-PERM positions.

Among the specific requirements, Cloudera must:

• Post PERM-related positions on its internal and external careers websites alongside comparable non-PERM openings.
• Accept electronic applications through its internal and external websites in the same manner as for other positions.
• Refrain from requiring applicants to apply by email for PERM-related positions.
• Ensure that online application functionality is available through state workforce agency websites where that option exists.
• Enter applicants into its applicant tracking system so that they remain searchable and available for consideration.
• Evaluate applicants’ qualifications in good faith and without unlawful citizenship-status discrimination.

These requirements are designed to address the recruitment deficiencies identified during the investigation and help ensure that U.S. workers have a genuine opportunity to apply for and be considered for the advertised positions.

4. Independent auditing, reporting, and employee training

The settlement imposes additional compliance obligations intended to verify that Cloudera’s revised procedures operate as required.

If Cloudera resumes PERM-related recruitment during the agreement’s term, it must retain and pay for an independent third-party auditor to verify compliance with the settlement and applicable pre-filing recruitment requirements. The auditor will be selected by mutual agreement between Cloudera and the DOL and must submit compliance reports to the DOL’s Office of Foreign Labor Certification (OFLC) and the DOJ’s IER. The reports will document Cloudera’s compliance with the settlement and applicable recruitment requirements, including periodic regulatory reports and individual compliance reports for each PERM certification filed during the agreement term.

Cloudera must additionally train its U.S.-based talent acquisition and HR operations personnel, recruiters, contractors, and agents on the INA’s anti-discrimination requirements. The DOJ retains authority to make reasonable compliance inquiries and request additional information during the agreement’s three-year term.

These obligations are important because they require the company to demonstrate ongoing compliance through documented procedures and independent review, rather than relying solely on assurances that corrective measures have been implemented.

Why the Settlement Matters for Employers

PERM compliance involves more than meeting DOL’s technical requirements

The Cloudera case illustrates the distinction between complying with PERM’s procedural requirements and complying with the INA’s separate anti-discrimination provisions. Employers must ensure that U.S. workers have a genuine opportunity to apply and that qualified applicants are evaluated in good faith – This has always been a fundamental principle of the PERM process. Even when formal recruitment steps have been completed, deficiencies in how the process operates can create significant compliance risks. Employers should therefore evaluate both whether required recruitment steps were completed and whether the process functioned as intended.

A central issue in Cloudera was the use of an application email address that could not receive external messages, preventing applicants from successfully applying. The settlement’s requirements concerning online applications, applicant tracking systems and consistent recruitment procedures underscore the importance of effective operational controls. Employers should verify that application channels function properly, applications reach the appropriate personnel, and applicants are appropriately tracked and evaluated.

The resolution also highlights the potential for coordinated enforcement by the DOJ and DOL. While the DOJ pursued the alleged citizenship-status discrimination violations under the INA, the DOL imposed restrictions tied to the PERM program. Employers should not assume that compliance with DOL’s recruitment requirements eliminates the risk of a separate investigation into discriminatory recruitment or hiring practices.

The consequences can extend across an employer’s immigration program

The two-year debarment is a particularly important aspect of the settlement. Rather than affecting only one application, the restriction prevents Cloudera from filing new PERM applications and conducting PERM-related recruitment during the specified period.

For employers with multiple sponsored employees, a disruption to PERM filings can have consequences for workforce planning, green card sponsorship timelines, and employees’ longer-term immigration options. Depending on the circumstances, affected employees may face additional uncertainty while employers evaluate alternative strategies.

This is a reminder that PERM compliance is not merely an administrative function within an individual immigration case. It is an employer-level responsibility that can impact an entire sponsorship program.

Practical Steps Employers Should Consider

In light of the Cloudera settlement, employers sponsoring foreign workers through PERM should consider reviewing their existing recruitment and compliance procedures. Practical steps include:

1. Audit application channels. Test all application links, email addresses, and other submission methods used in PERM-related recruitment to confirm that candidates can successfully apply.
2. Compare PERM and non-PERM recruitment. Evaluate whether comparable openings follow consistent procedures for advertising, candidate sourcing, application submission, and applicant tracking.
3. Document applicant consideration. Maintain accurate records of applications, communications, interview decisions, qualifications, and lawful, job-related reasons for rejecting candidates.
4. Train relevant personnel. Provide guidance on citizenship-status discrimination and establish clear procedures for identifying and escalating recruitment issues.
5. Establish a process for correcting problems. If an application channel fails or another recruitment defect is identified, promptly involve immigration counsel to assess the issue and determine the appropriate corrective action before proceeding.

These steps are not a guarantee against an investigation or enforcement action. They can, however, help employers identify preventable problems, improve documentation, and demonstrate a commitment to conducting PERM recruitment in good faith.

Conclusion

The Cloudera settlement is a significant reminder that PERM recruitment must be both procedurally compliant and meaningful in practice. The two-year debarment, $600,000 civil penalty, $1.4 million back-pay fund, and extensive oversight obligations demonstrate the potential consequences of recruitment practices that prevent qualified U.S. workers from receiving fair consideration.

For employers sponsoring foreign workers, the key takeaway is that PERM compliance should be integrated into the broader hiring process. Functional application systems, consistent recruiting practices, good-faith applicant evaluations, appropriate documentation, and employee training are all important components of an effective compliance program.

As government scrutiny of PERM-related recruitment continues, employers should periodically review their procedures and address potential deficiencies proactively. A recruitment process that is carefully designed, consistently implemented, and properly documented can help employers meet their obligations while supporting the integrity of the employment-based immigration system.

For more information or to discuss how the Cloudera settlement may impact your PERM process, please schedule a consultation here.

By: Krystal Alnais

Krystal Alanis is a Partner at Reddy Neumann Brown PC and serves as the Managing Attorney of the firm’s PERM Labor Certification Department, where she oversees all EB-2 and EB-3 employment-based green card matters. With over 14 years of experience, she advises employers and professionals on navigating complex business immigration processes with clarity and confidence. She has managed countless PERM applications across a wide range of industries, enabling her to anticipate challenges early and develop effective, efficient solutions.