IBM Ordered To Pay $17M To Settle Anti-DEI Case Against Trump Administration

The settlement seemingly resolves allegations of illegal diversity, equity and inclusion (DEI) practices after IBM allegedly identified “diverse” candidates for hiring or promotions while developing race and sex demographic goals.

Technology giant IBM has settled for $17 million with the Trump administration after the Department of Justice (DOJ) accused the company of “knowingly” making “false claims” regarding its hiring and employment practices found in federal contracts, CNN reports.

The settlement seemingly resolves allegations of illegal diversity, equity, and inclusion (DEI) practices after the New York-based tech firm allegedly identified “diverse” candidates for hiring or promotions while developing race and sex demographic goals. IBM denied the allegations of discriminatory and illegal DEI practices, but still settled. “IBM is pleased to have resolved this matter,” an IBM spokesperson said in a statement.

“Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on.”

According to The Star, the settlement marks the first resolution from the DOJ’s Civil Rights Fraud Initiative, a unit formed to crack down on DEI policies under ⁠a ‌civil anti-fraud law. Since Trump’s second term started, the administration has honed in on DEI being anti-merit and discriminatory against groups such as white people and ⁠men.

Back in May 2025, the DOJ started leaning on the False Claims Act as a way to target diversity initiatives at colleges, but since Trump signed executive orders asking federal contractors and subcontractors to eliminate the initiative from their practices, creating a domino effect in the corporate sector, IBM, as a contractor, got caught in the crosshairs. It faced allegations that the company violated the act by maintaining “practices that the United States contends were discriminatory employment practices.”

Dating back to the Civil War era, the False Claims Act gives the government permission to recover funds up to three times the damages it obtains, plus penalties. It also permits private citizens to file suit, claiming the government was defrauded, and to keep a portion of any money the federal government recovers.

In a press release, acting Attorney General Todd Blanche celebrated the settlement. “Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” Blanche said.

“The Department launched the Civil Rights Fraud Initiative to root out this misconduct, hold offenders accountable, and end this practice for good.”

Associate Attorney General Stanley Woodward also released a statement pushing that “merit drives promotion and opportunity, not someone’s sex or race.” “Today’s settlement proves this Department’s commitment to ensure companies are not using taxpayer-funded work to further woke unconstitutional practices in American workplaces,” she continued.