On April 10, 2026, the Department of Justice (DOJ) announced a nearly $17.1 million settlement with IBM to resolve allegations that IBM engaged in “illegal DEI practices” and violated the False Claims Act by failing to comply with anti-discrimination requirements in federal contracts. Notably, under the settlement agreement, IBM did not admit liability and expressly denied that it engaged in the conduct alleged. This settlement, and the underlying policy initiative on which it is based, have profound implications for entities that receive federal funding or have government contracts.
Most federal contracts contain provisions that require contractors to certify that it will abide by federal civil rights laws and not discriminate against job applicants or employees on the basis of race, color, national origin, or sex. On President Trump’s first day in office, he issued two executive orders requiring every federal contract or grant award to include a clause making compliance with federal anti-discrimination laws material to payment for purposes of the False Claims Act, and a certification that the contractor/grantee “does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” The orders also direct the DOJ and other government agencies to identify and investigate “egregious” DEI practitioners in key sectors, expressly including “the medical industry.”
On July 15, 2025, then-Attorney...
On Friday, April 10, 2026, the U.S. Department of Justice (DOJ) announced that International Business Machines Corporation (IBM) has agreed to pay just over $17 million to resolve allegations that ...