IBM Pays $17M to Settle DOJ DEI Allegations

International Business Machines Corporation agreed to pay more than $17 million to the U.S. Department of Justice on Friday to resolve allegations that its diversity, equity, and inclusion practices violated federal antidiscrimination laws tied to government contracts. The settlement, totaling $17,077,043, represents the first resolution under the DOJ's Civil Rights Fraud Initiative, launched in May 2025 to address potential civil rights violations by federal contractors.

The Justice Department contended that IBM failed to comply with requirements under its federal contracts, which mandate equal employment opportunities without regard to race, color, national origin, or sex. As a government contractor, IBM was required to certify adherence to these nondiscrimination provisions, part of the Civil Rights Act of 1964. Investigators alleged that the company incorporated demographic factors into employment decisions, including hiring, promotions, and compensation, while seeking reimbursement for related costs under its contracts.

Specific claims included the use of a "diversity modifier" that linked executive bonuses to achieving racial and gender demographic targets. The DOJ also...