- IBM to pay $17 million in settlement with US government
- The government alleged that IBM applied discriminatory DEI policies
- IBM said it was taking steps to eliminate DEI policies while denying it had any
IBM will pay more than $17 million in a settlement after the Trump administration claimed the company had discriminatory diversity, equity and inclusion (DEI) policies.
The settlement is the first successful claim made under the ‘Civil Rights Fraud Initiative,’ the US Department of Justice (DoJ) stated.
The total payment includes civil penalties and $8.2 million in restitution to the government.
Article continues below.
Trump continues his anti-DEI campaign
The Trump administration introduced the Civil Rights Fraud Initiative in May 2025. The initiative allows the government to pursue recipients of federal funds for damages and civil penalties by treating DEI policies as a “false claim” under the False Claims Act of 1863.
In its lawsuit, the Justice Department alleged that by failing to comply with anti-discrimination requirements in its federal contracts, IBM had violated the False Claims Act. The Justice Department explained that IBM had “discriminated against employees during employment and applicants for employment on the basis of race, color, national origin, or sex, and failed to treat employees during employment without regard to race, color, national origin, or sex.”
In addition to these claims, the Justice Department also alleged that IBM made employment decisions considering “race, color, national origin, or sex” and used a “diversity modifier that linked additional compensation to achieving demographic goals.”
Additionally, the Justice Department alleged that IBM “developed race and sex demographic goals for business units” and advanced these goals using DEI initiatives. The Justice Department further stated that IBM “sought payment and reimbursement under its contracts with the federal government” for the costs of the initiatives.
talking to Ars Techniquesaid an IBM spokesperson: “IBM is pleased to have resolved this matter. Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on.”
Confusingly, the settlement states that IBM ended the DEI initiatives it was accused of, while denying that they ever took place. The agreement states that IBM is “taking voluntary corrective action, including terminating and/or modifying various programs, policies or other activities described in the Covered Conduct,” and then states: “IBM denies engaging in the Covered Conduct.”
The Trump administration has aggressively pursued the dismantlement of DEI policies, and President Trump signed Executive Orders 14151 and 14173 immediately after his inauguration in January 2025, which sought to end the implementation of DEI policies by federal agencies and contractors.
On the Justice Department’s Civil Rights Anti-Fraud Initiative page, Deputy Attorney General Todd Blanche said, “The United States has seen a wave of anti-Semitism sweep through our universities and seen public institutions codify inherently divisive policies like DEI at an unprecedented pace,” adding that “the days of using federal funds to increase discrimination are over.”
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