IBM has agreed to pay $17 million to the Department of Justice to settle claims its diversity, equity and inclusion programs were discriminatory and unlawful.
It’s the first resolution reached under the Civil Rights Fraud Initiative, a new unit the Trump administration formed last year that uses a Civil War-era law to crack down on DEI programs.
“Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” Acting Attorney General Todd Blanche said in a statement.
The settlement, which was announced Friday, resolved allegations from the federal government that IBM “knowingly maintained practices” that the US had deemed “discriminatory,” allegations IBM denied.
The feds claimed the New York-based computer giant identified “diverse” candidates when considering promotions, tied bonuses to achieving certain diversity goals and offered special training and development programs only to certain staffers on the basis of race or sex.
The settlement noted that it was “neither an admission of liability by IBM nor a concession by the United States that its claims are not well founded.”
The size of the settlement was a drop in the bucket for IBM, which is valued at over $200 billion.
“IBM is pleased to have resolved this matter,” a spokesperson for the company told The Post. “Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on.”
In its settlement, the government acknowledged that IBM cooperated with its investigation by making early disclosures and taking voluntary remedial measures, including ending or modifying violative DEI programs.
President Trump has aggressively cracked down on DEI practices in his second term, arguing such programs have erased “merit-based opportunity.”
Immediately upon returning to the Oval Office, Trump signed an executive order demanding all federal agencies axe their DEI offices and roles.
He has also ordered federal contractors and subcontractors to end all of their diversity initiatives, and urged private companies to take the same actions.
A broad sweep of companies – including Target, Meta, Amazon and Google – rolled back their diversity programs in the months around Trump’s inauguration.
Last May, the DOJ started using the False Claims Act to target universities and companies, arguing they were violating the law by knowingly carrying out illicit DEI programs.
The False Claims Act, also known as the “Lincoln Law,” is an 1863 federal law signed by President Abraham Lincoln to prevent contractor fraud during the Civil War.
Under the law, any person who knowingly submits false claims to the government is liable for three times the government’s damages, plus penalties. Private citizens are able to file lawsuits on the government’s behalf if they believe a company is guilty of fraud.
The Trump administration has also started taking aim at company-led events that it claims discriminate against white people and men by inviting only certain employees on the basis of race or sex.
The federal government in February sued a New Hampshire-based Coca-Cola bottler for hosting a women-only networking event, accusing it of discriminating against men.
