IBM has agreed to fork over $17 million to settle claims from the Trump administration alleging that its diversity, equity, and inclusion (DEI) policies discriminated against employees and job-seekers. This settlement marks the first under a new Civil Rights Fraud Initiative launched in 2025, which expanded the scope of the False Claims Act to include DEI complaints.

The US Department of Justice alleged that IBM failed to comply with its anti-discrimination requirements in federal contracts, certifying compliance despite maintaining practices that discriminated on grounds of race, color, national origin, or sex. The claims included allegations of using a diversity modifier tied to bonus compensation and altering interview criteria based on race or sex.

IBM’s DEI policies were also criticised for offering training and mentoring exclusively to certain employees, with eligibility limited by race or sex. Furthermore, the company was accused of allocating costs related to these practices under its federal government contracts and seeking reimbursement.

The settlement is a stark reminder that even in post-Trump America, tech giants may still face scrutiny over their DEI practices. The move could set a precedent for future audits and settlements involving major corporations.