IBM to pay $17M in first False Claims Act DEI settlement

On April 10, 2026, the Department of Justice (DOJ) announced that IBM had agreed to pay the U.S. government $17,077,043 to resolve allegations it violated the False Claims Act (FCA) by failing to comply with antidiscrimination requirements of its  federal contracts. The government claims IBM discriminated against employees and applicants for employment based on race, color, national origin, or sex. Acting Attorney General Todd Blanche said this was a major win for the Trump administration’s push against diversity, equity, and inclusion (DEI) because it was the first successful use of the FCA under the DOJ’s Civil Rights Fraud Initiative. 

Allegations 

As a condition to being a federal contractor, a company must certify that it won’t discriminate against employees or applicants because of race, color, national origin, or sex and must further certify that applicants and employees aren’t discriminated against based on race, color, national origin, or sex. The settlement resolves allegations that IBM knowingly maintained DEI practices that  were discriminatory. 

In the settlement, the DOJ alleged that IBM took race, color, national origin, or sex into account when making employment decisions, including by: