IBM just settled a major anti-DEI case for $17 million

It’s the first instance of an employer settling a case that the government brought as part of an initiative to investigate federal contractors.

[Photo: Matthias Balk/picture alliance via Getty Images]

In 2025—not long after Trump fired off executive orders that targeted diversity, equity, and inclusion (DEI) programs in the workplace—the Justice Department announced the Civil Rights Fraud Initiative. Its purpose was to investigate companies and academic institutions that accepted money from the government, by invoking a federal law called the False Claims Act. This past week, IBM agreed to pay $17 million over claims that its DEI programs allegedly violated the law—the first instance of an employer settling a case that the government brought under this initiative. 

In the settlement agreement, the federal government argued that as a federal contractor, IBM was required to comply with anti-discrimination protections under civil rights law. The government identified DEI programs that allegedly took demographic background into consideration when making employment decisions, including a “diversity modifier that tied bonus compensation to achieving diversity targets” and the use of “diverse interview slates” as part........

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