- IBM will pay $17 million in a settlement with the US government
- The government alleged that IBM followed discriminatory DEI policies
- IBM said it was taking steps to remove DEI policies, while also denying it had any
IBM must pay over $17 million in a settlement after the Trump administration alleged the company had discriminatory diversity, equity and inclusion (DEI) policies.
The settlement is the first successful claim brought under the ‘Civil Rights Fraud Initiative’, the US Department of Justice (DoJ) has claimed.
The total payment includes civil penalties and $8.2 million in restitution to the government.
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Trump continues the anti-DEI push
The Trump administration introduced the Civil Rights Fraud Initiative in May 2025. The initiative allows the government to pursue federal beneficiaries for damages and civil penalties by treating DEI policies as a ‘false claim’ under the False Claims Act of 1863.
In its claim, the DoJ argued that by failing to comply with the anti-discrimination requirements of its federal contracts, IBM had therefore violated the False Claims Act. The DoJ explained that IBM had “discriminated against employees during employment and applicants 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 allegations, the DoJ also alleged that IBM made hiring decisions by taking into account “race, color, national origin or sex” and used a “diversity modifier that tied bonus compensation to meeting demographic goals.”
Furthermore, the DoJ alleged that IBM “developed race and gender demographic targets for business units” and promoted those targets using DEI initiatives. The DoJ further alleged that IBM was “seeking payment and reimbursement under its federal government contracts” for the costs of the initiatives.
speaks to Ars Technicasaid an IBM spokesman, “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 customers depend on.”
Confusingly, the settlement states that IBM has both ended the DEI initiatives it was accused of having while denying they ever took place. The settlement states that IBM is “taking voluntary remedial measures, including termination and/or modification of various programs, policies or other activities described in the covered conduct,” and then states, “IBM denies that it engaged 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 DoJ page for the Civil Rights Fraud Initiative, Deputy Attorney General Todd Blanche said, “America has seen a tidal wave of anti-Semitism wash over our universities and seen public institutions codify inherently divisive policies like DEI at an unprecedented pace,” adding that “the days of spending additional federal funds are over.”
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