The days of using federal funds to further discrimination are over: IBM to
pay $17 million in first-of-its-kind Civil Rights Fraud Initiative settlement
Trump administration anti-DEI push seeks to strip businesses of inherently divisive policies
Date:
Tue, 14 Apr 2026 13:53:36 +0000
Description:
The first settlement claim under the Civil Rights Fraud Initiative will see IBM pay $17 million to the US government.
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now subscribed Your newsletter sign-up was successful Join the club Get full access to premium articles, exclusive features and a growing list of member rewards. Explore An account already exists for this email address, please log in. Subscribe to our newsletter IBM will pay $17 million in a settlement with the US government The government alleged that IBM pursued discriminatory DEI policies IBM said it was taking measures to remove DEI policies while also denying it had any IBM is set to pay over $17 million in a settlement after the Trump administration claimed the firm had discriminatory diversity, equity, and inclusion (DEI) policies.
The settlement is the first successful claim made under the Civil Rights Fraud Initiative , the US Department of Justice (DoJ) has claimed. The total payment includes civil penalties and $8.2 million in restitution to the government. Article continues below You may like Adobe reaches $150m settlement on US lawsuit over alleged hidden subscription fees, cancellation charges John Deere may have to pay out major $99 million settlement in landmark 'right-to-repair' case IBM says it will actually start hiring entry-level human workers, rather than relying entirely on AI Trump continues anti-DEI push The Trump administration introduced the Civil Rights Fraud Initiative in May 2025. The initiative allows the government to pursue
federal funding recipients for damages and civil penalties by treating DEI policies as a false claim under the False Claims Act of 1863 .
In its claim, the DoJ alleged that by failing to comply with anti-discrimination requirements in its federal contracts, IBM had therefore violated the False Claims Act. The DoJ explained that IBM had discriminated against employees during employment and applicants for employment because of race, color, national origin, or sex, and failed to treat employees during employment without regard to race, color, national origin, or sex.
Alongside these claims, the DoJ also alleged that IBM made employment decisions by taking into account race, color, national origin, or sex and
used a diversity modifier that tied bonus compensation to achieving demographic targets.
Furthermore, the DoJ alleged that IBM developed race and sex demographic
goals for business units and progressed these goals using DEI initiatives.
The DoJ additionally claimed that IBM sought payment and reimbursement under its federal government contracts for the costs of the initiatives. Are you a pro? Subscribe to our newsletter Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed! Contact me with news and offers from other Future brands Receive email from us on behalf of our trusted partners or sponsors By submitting
your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.
Speaking to Ars Technica , an IBM spokesperson said, IBM is pleased to have resolved this matter. Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on.
Confusingly, the settlement states that IBM has both ended the DEI
initiatives it was accused of having, while also denying they ever took
place. The settlement states that IBM is taking voluntary remedial measures, including the termination and/or modification of various programs, policies, or other activities described in the Covered Conduct, and then states, IBM denies that it engaged in the Covered Conduct.
The Trump administration has aggressively pursued the dismantling of DEI policies, with President Trump signing executive orders 14151 and 14173 immediately following his inauguration in January 2025 - both of which sought to end the implementation of DEI policies by federal agencies and
contractors.
On the DoJ page for the Civil Rights Fraud Initiative, Deputy Attorney
General Todd Blanche said, America has watched a tidal wave of anti-Semitism sweep our universities and seen public institutions codify inherently
divisive policies like DEI at an unprecedented rate, adding that the days of using federal funds to further discrimination are over. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button!
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