IBM to pay $17 million in anti-DEI settlement
By Auzinea Bacon, CNN
(CNN) — IBM reached a settlement with the federal government on Friday, agreeing to pay roughly $17 million to resolve allegations of illegal diversity, equity and inclusion (DEI) practices.
Acting Attorney General Todd Blanche announced the settlement agreement in a press release.
The DOJ had alleged that the New York-based technology firm “knowingly” made “false claims” about its hiring and employment practices in its federal contracts, according to the settlement. IBM allegedly identified “diverse” candidates for hiring or promotions, while developing race and sex demographic goals.
“IBM is pleased to have resolved this matter,” an IBM spokesperson told CNN over email. “Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on.”
IBM denied that it had discriminatory and illegal DEI practices. The settlement emphasized that the agreement was “neither an admission of liability by IBM nor a concession by the United States that its claims are not well founded.”
The Trump administration last year cracked down on DEI practices in public and private sectors, including in federal hiring and contracting. Four days into President Donald Trump’s second term, federal agencies were told to terminate all DEI offices and positions.
The DOJ in May 2025 began using the False Claims Act to target diversity initiatives at colleges and alleged that IBM, as a contractor, violated the act by maintaining “practices that the United States contends were discriminatory employment practices,” according to the announcement on Friday.
“Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” Blanche said in Friday’s press release. “The Department launched the Civil Rights Fraud Initiative to root out this misconduct, hold offenders accountable, and end this practice for good.”
The False Claims Act dates back to the Civil War era and allows the government to recover funds up to three times the damages it incurs, in addition to penalties, according to the DOJ.
The law also allows private citizens to file suit, claiming the government was defrauded and to keep a portion of any money the federal government recovers.
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CNN’s Karina Tsui and Andy Rose contributed to this report.
