IBM pays $17M fine to end DOJ suit over DEI programs

IBM entered into a $17 million settlement agreement on Friday with the U.S. Department of Justice over allegations that it engaged in “illegal DEI practices” by taking into account “race, color, national origin, or sex” in its hiring and promotions. The DOJ also alleged that IBM used funds from its government contract for DEI programs and then sought reimbursement.
IBM denied any wrongdoing, and the settlement is not an admission of liability nor a concession that the DOJ’s claims were without merit. “IBM is pleased to have resolved this matter. Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on,” an IBM spokesperson told TechCrunch.
Earlier last year, the now-former attorney general, Pam Bondi, instructed the DOJ to “investigate, eliminate, and penalize” any DEI programs deemed illegal in private-sector companies, like IBM, that receive federal funds, which IBM does as a government contractor. Shortly after, the DOJ announced the Civil Rights Fraud Initiative, which involves filing claims against recipients of federal funds who “knowingly violate civil rights laws.” The IBM settlement marks the first time the government has secured a resolution under the initiative.