ibm / doj / dei

IBM has become the first company to settle with the US government under the Trump administration’s Civil Rights Fraud Initiative, paying $17,077,043 to resolve allegations it violated the False Claims Act by not complying with anti-discrimination requirements in federal contracts. The Department of Justice said IBM allegedly used “diverse interview slates,” set race- and sex-based demographic goals that influenced employment decisions, and limited some training and development programs by race or sex. IBM did not admit liability but cooperated with investigators, according to settlement documents. The initiative stems from Executive Order 14173 (January 2025) targeting DEI practices deemed discriminatory, followed by the program’s launch in May 2025 and additional contractor reporting requirements in March 2026. Law firm Latham & Watkins said the conduct may predate the 2025 order.

IBM agreed on Friday to pay $17 million to settle a U.S. Department of Justice lawsuit alleging the company engaged in “illegal DEI practices.” The settlement ends the DOJ’s case without a trial and closes a legal dispute focused on IBM’s diversity, equity and inclusion programs. While the brief report does not detail the specific practices challenged, the payment signals heightened federal scrutiny of corporate DEI initiatives and the legal risks companies may face when designing hiring, promotion, or contracting programs tied to protected characteristics. The agreement’s size—$17 million—underscores the potential financial and reputational costs of compliance disputes. No additional information was provided on whether IBM admitted wrongdoing or agreed to change policies as part of the settlement.

IBM agreed to pay $17 million under the U.S. Department of Education’s new Civil Rights Fraud Initiative while denying any misconduct, becoming the first company to settle under the program. The settlement follows allegations that IBM’s diversity, equity and inclusion (DEI) initiatives and related communications misrepresented compliance with federal civil-rights requirements; IBM did not admit wrongdoing but consented to the penalty. The case signals increased federal scrutiny of corporate DEI efforts and could pressure other tech firms to reassess public DEI statements and programs. For the tech industry, the settlement raises compliance, legal and public-relations risks around how companies document and communicate diversity practices. Key players: IBM and the U.S. Department of Education’s enforcement effort.

IBM agreed to pay $17.08 million to resolve a DOJ claim under the Trump-era Civil Rights Fraud Initiative that its DEI policies violated federal anti-discrimination requirements in government contracts. The Justice Department alleged IBM used race- and sex-based modifiers for bonuses, adjusted interview criteria, and limited certain training and programs to particular demographic groups while billing related costs to federal contracts. The settlement requires IBM to stop the described practices and pay civil penalties plus $8.2 million in restitution, though IBM denies it engaged in the alleged conduct. The case is notable as the first secured under the initiative and signals intensified federal scrutiny of corporate DEI programs affecting contractors.

IBM agreed to pay about $17 million to settle Department of Justice allegations that its diversity, equity and inclusion (DEI) hiring practices violated the False Claims Act by making false claims in federal contracts. The settlement, announced by Acting Attorney General Todd Blanche, follows DOJ claims that IBM identified “diverse” candidates while setting race- and sex-based demographic goals, conduct the government deemed discriminatory. IBM denied liability and said the settlement is not an admission of wrongdoing. The move is part of a broader DOJ Civil Rights Fraud Initiative targeting DEI programs after the Trump administration’s crackdown on diversity offices in federal agencies, signaling heightened legal risk for contractors’ DEI policies.