IBM has agreed to pay $17 million to the US government to resolve allegations that its diversity, equity, and inclusion (DEI) policies violated anti-discrimination requirements in its federal contracts. The Justice Department announced the settlement on Friday, marking the first resolution under the Trump administration's Civil Rights Fraud Initiative, launched in May 2025.
The initiative leverages the False Claims Act of 1863, which imposes triple damages and civil penalties on government contractors found to have defrauded the government. The DOJ alleged that IBM certified compliance with anti-discrimination requirements while maintaining practices that discriminated against employees and job applicants based on race, color, national origin, or sex.
'IBM failed to treat employees and applicants without regard to race, color, national origin, or sex, violating the terms of its federal contracts,' the Justice Department stated.
IBM did not admit to any wrongdoing as part of the settlement. The case highlights the Trump administration's broader efforts to scrutinize DEI policies in government contracting and enforce compliance with anti-discrimination laws. Critics argue that such policies often prioritize identity over merit, while proponents claim they promote fairness and inclusion.
The settlement underscores the administration's commitment to ensuring that federal contractors adhere to laws protecting American workers from discriminatory practices.