IBM Agrees To Pay The US $17M In Settlement Over A Lawsuit Accusing The Tech Firm Of Promoting DEI

International Business Machines Corp. (IBM) has agreed to pay the United States $17 million to settle a lawsuit accusing the tech firm of promoting diversity, equity, and inclusion (DEI) policies in its federal contracts.

The U.S. Department of Justice announced the settlement in a news release on Friday, April 10, 2026. The agreement marks the first resolution under the department’s Civil Rights Fraud Initiative, launched in May 2025 to target DEI-related practices using a civil anti-fraud law.

 

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“Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” said Acting Attorney General Todd Blanche. “The Department launched the Civil Rights Fraud Initiative to root out this misconduct, hold offenders accountable, and end this practice for good.”

What DEI Practices Did The Government Accuse IBM Of?

IBM allegedly considered factors such as race, color, national origin, and sex when making employment decisions. The company’s actions included using a diversity modifier that linked employee bonuses to demographic targets, the news release stated.

The government also accused the company of adjusting its interview process by implementing “diverse interview slates” and similar practices to identify candidates for hiring, transfers, and promotions, per the release. According to the allegations, the company set demographic goals for business units and factored those targets into employment decisions.

Additionally, the government claimed that IBM limited certain training programs, partnerships, mentoring opportunities, leadership development initiatives, and educational offerings to specific employee groups.

As part of the settlement, the government recognized that IBM took clear action to cooperate with the investigation, the press release noted. The company reportedly shared early disclosure of relevant findings from its internal review and took voluntary corrective steps, such as modifying or ending certain programs and practices in question.

“The Nation’s anti-discrimination laws are clear and reflect our basic commitment that opportunity, compensation, and advancement should turn on merit and performance, and not immutable characteristics,” said Deputy Assistant Attorney General Brenna E. Jenny. “When a company accepts federal funding while engaging in practices that sort, prefer, or disadvantage employees on the basis of race or sex, the company is stepping outside the conditions under which the government agreed to contract with them, and we will hold them accountable.”

Trump Administration Targets DEI Initiatives

Most federal contracts have clauses requiring contractors to follow anti-discrimination laws for both employees and job applicants, the Justice Department stated in its news release. As part of those agreements, companies must certify they will not discriminate based on race, color, national origin, or sex, and must also take steps to ensure fair hiring and workplace practices.

As AFROTECH previously reported, the Trump administration has worked to dismantle DEI initiatives across the federal government and higher education. President Donald Trump has signed multiple executive orders targeting DEI efforts since returning to office in January 2025.

The president’s actions triggered widespread changes across the federal workforce. Agencies eliminated DEI-focused roles, closed related offices, and carried out layoffs tied to those programs, AFROTECH noted.

 

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A number of major corporations have also scaled back or ended their DEI initiatives in response to the administration’s agenda. The companies span industries from finance to retail and tech, including Wells Fargo, Morgan Stanley, Walmart, Target, Amazon, and Meta, according to AFROTECH.

The Future Of DEI Enforcement

Amid heightened scrutiny of DEI practices, IBM’s settlement could signal how the government plans to enforce anti-discrimination laws in federal contracts moving forward.

“Merit drives promotion and opportunity. Not someone’s sex or race,” Associate Attorney General Stanley Woodward said in Friday’s news release. He added that the settlement reflects the Justice Department’s “commitment to ensure companies are not using taxpayer funded work to further woke unconstitutional practices in American workplaces.”

The post IBM Agrees To Pay The US $17M In Settlement Over A Lawsuit Accusing The Tech Firm Of Promoting DEI appeared first on AfroTech.

The post IBM Agrees To Pay The US $17M In Settlement Over A Lawsuit Accusing The Tech Firm Of Promoting DEI appeared first on AfroTech.