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Thursday, April 23, 2026

DOJ’s $17 Million False Claims Act Settlement With IBM: Proof-of-Concept for Potential DEI Whistleblower Suits - ArentFox Schiff

On April 10, the US Department of Justice (DOJ) announced that International Business Machines Corporation (IBM) agreed to pay more than $17 million to resolve allegations that it violated the False Claims Act (FCA) by failing to comply with anti-discrimination requirements as set forth in Title VII of the Civil Rights Act of 1964.

The requirement to comply with Title VII is ubiquitous in federal contracts (as it applies to firms with 15 or more employees), and the settlement represents the vanguard of potential enforcement actions and whistleblower suits that challenge diversity, equity, and inclusion (DEI) practices.

Since the beginning of the Trump Administration, the DOJ has telegraphed its intent to use the FCA to combat perceived discrimination under DEI practices. Federal contractors and grant recipients that have not already done so should carefully assess their DEI-related policies, programs, and practices in light of this heightened enforcement posture and the growing risk of whistleblower suits.

The ‘Covered Conduct’

The settlement resolves government allegations that IBM violated its obligation to comply with anti-discrimination requirements of Title VII of the Civil Rights Act of 1964. As a federal contractor, IBM is required to certify that it does not discriminate against employees or applicants for employment because of race, color, national origin, or sex and that it will take steps to ensure that applicants and employees are treated without regard to...



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