IBM pays $17 million to settle DOJ allegations over DEI practices

IBM has agreed to pay more than $17 million to settle allegations by the U.S. Department of Justice that the company's diversity, equity, and inclusion programs violated civil rights laws. The settlement, announced Friday, resolves claims that IBM engaged in employment practices that improperly considered race, color, national origin, and sex in hiring and promotion decisions. According to the DOJ, IBM's practices included altering interview criteria based on race or sex, establishing demographic goals for business units, and using a diversity modifier that tied bonus compensation to achieving demographic targets. IBM denied any wrongdoing and stated the settlement was not an admission of liability. A company spokesperson said IBM is "pleased to have resolved this matter" and emphasized that its workforce strategy focuses on "having the right people with the right skills that our clients depend on." The settlement stems from the Civil Rights Fraud Initiative launched in May 2025 under the Trump administration. The initiative was created following an executive order in early 2025 that sought to end DEI programs across federal contractors and recipients of federal funding. This marks one of the first major resolutions to emerge from the initiative. Other technology companies have also moved to alter their DEI policies in recent months, including T-Mobile and Meta, both of which announced the end of their diversity programs last year. Under the terms of the settlement agreement, the U.S. government noted that its acceptance of the settlement was not a concession that its claims lacked merit.