On Friday, IBM finalized an accord with the federal government, consenting to a payout of roughly $17 million to resolve accusations concerning improper diversity, equity, and inclusion (DEI) operations.
The acting Attorney General, Todd Blanche, made the agreement public through a press release.
The Department of Justice contended that the New York-based technology conglomerate had “knowingly” furnished “misleading representations” about its hiring and employment methods within the scope of federal contracts, as detailed in the settlement terms. IBM allegedly marked applicants as “diverse” for hiring or promotion while simultaneously establishing demographic benchmarks based on ethnicity and gender.
“IBM is pleased to finalize this matter,” an IBM spokesperson communicated to CNN via email. “Our talent strategy is guided by a singular principle: securing the precise individuals possessing the requisite skills upon whom our clientele depends.”
IBM had previously refuted engaging in any discriminatory or unlawful DEI procedures. The settlement explicitly noted that the agreement “does not constitute an admission of liability by IBM, nor is it a concession by the United States that its allegations lack merit.”
The Trump administration had amplified its stance against DEI practices across both public and private sectors the prior year, encompassing federal recruitment and contracting. Merely four days into a second term for President Donald Trump, federal agencies received directives to dismantle all DEI offices and positions.
In May 2025, the DOJ initiated the application of the False Claims Act to target diversity initiatives within academic institutions, asserting that IBM, as a contractor, violated the statute by upholding “practices that the U.S. deems discriminatory in employment,” according to a statement released Friday.
“Racial discrimination is illegal, and federal contractors are prohibited from circumventing the law by repackaging it as DEI,” Blanche declared in Friday’s press release. “The Department has launched the Civil Rights Fraud Initiative to eradicate this misconduct, hold violators accountable, and bring this behavior to a definitive close.”
The False Claims Act dates back to the Civil War era and empowers the government to recoup up to treble damages in addition to penalties, according to DOJ information.
Furthermore, the statute permits private citizens to file lawsuits alleging deceit against the government, retaining a portion of the funds recovered by the federal authority.
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