Key Takeaways

• On April 10, 2026, Acting Attorney General Todd Blanche announced the first False Claims Act (“FCA”) resolution under the Department of Justice’s (“DOJ”) Civil Rights Fraud Initiative, with IBM agreeing to pay $17,077,043 to resolve allegations that its diversity, equity, and inclusion (“DEI”) practices violated anti-discrimination requirements in its federal contracts.
• The settlement is the first FCA case brought by DOJ that has been made public implementing the Trump Administration’s strategy of using FCA for civil rights enforcement.
• The categories of conduct alleged in the IBM settlement reflect a range of practices affecting hiring, compensation, and other employment practices that take race or sex into account. Companies that contract with or receive funding from the federal government should take a broad view when assessing which practices may give rise to civil rights compliance risk.

I. The IBM Settlement

On April 10, 2026, DOJ announced that IBM agreed to pay the United States $17,077,043, inclusive of civil penalties, to resolve allegations that it violated the FCA by failing to comply with anti-discrimination requirements in its federal contracts. Specifically, IBM’s contracts required it to comply with Title VII of the Civil Rights Act of 1964 and the Federal Acquisition Regulation, including FAR clause 52.222-26.

According to DOJ, IBM knowingly maintained practices that discriminated against employees and applicants for employment because of...

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