International Business Machines Corp. (IBM) will pay more than $17 million to settle allegations it violated federal anti-discrimination rules tied to government contracts, the U.S. Department of Justice (DOJ) said Friday.
The settlement is the first under the DOJ’s Civil Rights Fraud Initiative, launched in May 2025. Acting Attorney General Todd Blanche said the deal resolves claims that IBM failed to comply with rules banning discrimination based on race, color, national origin, or sex in federal contract work.
“Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” Blanche said. “The Department launched the Civil Rights Fraud Initiative to root out this misconduct, hold offenders accountable, and end this practice for good.”
Under the agreement, IBM will pay $17,077,043, including civil penalties. The government alleged the company factored protected characteristics into hiring, promotions, and pay decisions, violating the False Claims Act.
Federal contractors have to certify that they do not discriminate and ensure equal treatment of employees and applicants. The DOJ said IBM knowingly maintained practices that violated those requirements.
In the settlement, the DOJ alleges that IBM made modifications to pay, bonuses, and other compensation that caused employees to consider race, color, national origin, or sex in employment decisions, including the use of a “diversity modifier” that tied bonus compensation to...
International Business Machines Corp. (IBM) will pay more than $17 million to settle allegations it violated federal anti-discrimination rules tied to government contracts, the U.S. Department of ...