- IBM to pay $17 million in deal with US government
- The government alleged that IBM pursued discriminatory DEI policies
- IBM said it was taking steps to remove DEI policies while denying having
IBM is set to pay more than $17 million in a settlement after the Trump administration claimed the company had discriminatory diversity, equity and inclusion (DEI) policies.
This settlement is the first complaint successfully filed under the Civil Rights Fraud Initiative, the US Department of Justice (DoJ) said.
The total payment includes civil penalties and $8.2 million in restitution to the government.
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Trump continues his anti-DEI campaign
The Trump administration introduced the Civil Rights Fraud Initiative in May 2025. The initiative allows the government to sue recipients of federal funding for damages and civil penalties by treating DEI policies as a “misrepresentation” under the False Claims Act of 1863.
In its complaint, the DoJ alleged that by failing to comply with anti-discrimination requirements in its federal contracts, IBM therefore violated the False Claims Act. The DoJ explained that IBM “discriminated against employees during employment and applicants for employment because of race, color, national origin, or sex, and failed to treat employees during employment without regard to race, color, national origin, or sex.”
Along with these claims, the DoJ also alleged that IBM made employment decisions based on “race, color, national origin, or gender” and used a “diversity modifier that tied bonus pay to the achievement of demographic goals.”
Additionally, the DoJ alleged that IBM “developed race- and gender-related demographic goals for business units” and advanced those goals through DEI initiatives. The DoJ further asserted that IBM “requested payment and reimbursement under its contracts with the federal government” for the costs of the initiatives.
Talk to Ars Technicaan IBM spokesperson said: “IBM is pleased to have resolved this issue. Our workforce strategy is driven by one principle: having the right people with the right skills our customers depend on.”
Confusingly, the settlement states that IBM both terminated the DEI initiatives it was accused of, while denying that they ever took place. The settlement states that IBM “takes voluntary corrective action, including termination and/or modification of various programs, policies or other activities described in the covered conduct,” then states: “IBM denies participating in the covered conduct.”
The Trump administration has aggressively pursued the dismantling of DEI policies, with President Trump signing Executive Orders 14151 and 14173 immediately after his inauguration in January 2025 – both of which sought to end the implementation of DEI policies by federal agencies and contractors.
On the Justice Department’s Civil Rights Fraud Initiative page, Assistant Attorney General Todd Blanche said, “America has seen a tidal wave of anti-Semitism sweep through our universities and seen public institutions codify inherently divisive policies like DEI at an unprecedented rate,” adding that “the days of using federal funds to increase discrimination are over.”
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