IBM becomes first company to pay up under Trump administration's diversity blitz
(2026/04/14)
- Reference: 1776165249
- News link: https://www.theregister.co.uk/2026/04/14/ibm_dei_settlement/
- Source link:
IBM has become the first company to settle with the US government under the Trump administration's Civil Rights Fraud Initiative, a program aimed at ensuring diversity programs don't cross a line and result in discrimination.
The administration defined its position on Diversity, Equity, and Inclusion (DEI) in [1]Executive Order 14173 , issued in January 2025, which points out that US civil rights laws prevent discrimination based on race, color, religion, sex, or national origin. The order argues that organizations that run DEI programs may "actively use dangerous, demeaning, and immoral race and sex-based preferences" in violation of civil rights laws.
The order sought to stop federal contractors from operating DEI programs. In May 2025, the administration backed the order by creating the Civil Rights Fraud Initiative to investigate allegedly illegal DEI programs and handle whistleblower complaints. The instrument for those investigations is the False Claims Act (FCA), a law that imposes liability on organizations that provide false information to the federal government.
[2]
A [3]March 2026 Executive Order added a requirement for federal government contractors to report on any DEI activity that contravenes the orders.
[4]
[5]
Last Friday, the Department of Justice [6]announced the Initiative's first success: a settlement with IBM that will see the tech giant pay the US government $17,077,043 "to resolve allegations that it violated the False Claims Act by failing to comply with anti-discrimination requirements in its federal contracts."
The feds allege IBM pursued illegal DEI in three ways:
Constructed "diverse interview slates" when hiring staff
Developed "race and sex demographic goals for business units and took race and sex into account when making employment decisions" then measured progress against those goals
"Offered certain training, partnerships, mentoring, leadership development programs and educational opportunities only to certain employees, with eligibility, participation, access or admission limited on the basis of race or sex"
A [7]settlement document [PDF] reveals IBM did not admit liability for the allegations, but assisted the feds with their inquiries.
Big Blue has also [8]denied that it practices age discrimination on many occasions.
[9]
The feds did not concede that its claims were unfounded.
Deputy Assistant Attorney General Brenna E. Jenny welcomed the settlement, saying: "When a company accepts federal funding while engaging in practices that sort, prefer, or disadvantage employees on the basis of race or sex, the company is stepping outside the conditions under which the government agreed to contract with them, and we will hold them accountable."
[10]Python Foundation goes ride or DEI, rejects government grant with strings attached
[11]White House bans 'woke' AI, but LLMs don't know the truth
[12]US govt's science foundation purges 37 divisions, equity unit among casualties
[13]Pentagon celebrates snipping 0.58% from defense budget in IT, DEI cuts
Law firm Latham & Watkins LLP [14]observed that the matter appears to relate to contracts IBM entered into before the 2025 executive order.
The firm also asserted that "IBM received settlement credit for cooperating with DOJ's investigation, including making early factual disclosures, assisting in the calculation of damages and penalties, and voluntarily terminating or modifying the programs and practices at issue."
"The scope of covered conduct and settlement methodology provide insight into the way DOJ is evaluating FCA liability based on alleged discrimination, and underscore DOJ's commitment to aggressively pursue FCA claims," Latham & Watkins advised.
[15]
Another firm, Epstein Becker Green, advised organizations for which "DEI remains a core mission or value" to "stay informed about changes in the law related to DEI and remain 'a step ahead' of any federal DEI investigation or enforcement action."
So perhaps it will be possible to run DEI programs without following IBM's lead. ®
Get our [16]Tech Resources
[1] https://www.federalregister.gov/documents/2025/01/31/2025-02097/ending-illegal-discrimination-and-restoring-merit-based-opportunity
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.whitehouse.gov/presidential-actions/2026/03/addressing-dei-discrimination-by-federal-contractors/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.justice.gov/opa/pr/ibm-pays-17-million-resolve-allegations-discrimination-through-illegal-dei-practices
[7] https://www.justice.gov/opa/media/1435761/dl
[8] https://www.theregister.com/2023/09/21/ibm_age_discrimination/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2025/10/27/python_foundation_abandons_15m_nsf/
[11] https://www.theregister.com/2025/07/24/white_house_wants_no_woke_ai/
[12] https://www.theregister.com/2025/05/09/nsf_axes_37_division/
[13] https://www.theregister.com/2025/04/11/defense_department_cancels_contracts/
[14] https://www.lw.com/en/insights/ibm-pays-in-first-dei-related-false-claims-act-resolution
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://whitepapers.theregister.com/
The administration defined its position on Diversity, Equity, and Inclusion (DEI) in [1]Executive Order 14173 , issued in January 2025, which points out that US civil rights laws prevent discrimination based on race, color, religion, sex, or national origin. The order argues that organizations that run DEI programs may "actively use dangerous, demeaning, and immoral race and sex-based preferences" in violation of civil rights laws.
The order sought to stop federal contractors from operating DEI programs. In May 2025, the administration backed the order by creating the Civil Rights Fraud Initiative to investigate allegedly illegal DEI programs and handle whistleblower complaints. The instrument for those investigations is the False Claims Act (FCA), a law that imposes liability on organizations that provide false information to the federal government.
[2]
A [3]March 2026 Executive Order added a requirement for federal government contractors to report on any DEI activity that contravenes the orders.
[4]
[5]
Last Friday, the Department of Justice [6]announced the Initiative's first success: a settlement with IBM that will see the tech giant pay the US government $17,077,043 "to resolve allegations that it violated the False Claims Act by failing to comply with anti-discrimination requirements in its federal contracts."
The feds allege IBM pursued illegal DEI in three ways:
Constructed "diverse interview slates" when hiring staff
Developed "race and sex demographic goals for business units and took race and sex into account when making employment decisions" then measured progress against those goals
"Offered certain training, partnerships, mentoring, leadership development programs and educational opportunities only to certain employees, with eligibility, participation, access or admission limited on the basis of race or sex"
A [7]settlement document [PDF] reveals IBM did not admit liability for the allegations, but assisted the feds with their inquiries.
Big Blue has also [8]denied that it practices age discrimination on many occasions.
[9]
The feds did not concede that its claims were unfounded.
Deputy Assistant Attorney General Brenna E. Jenny welcomed the settlement, saying: "When a company accepts federal funding while engaging in practices that sort, prefer, or disadvantage employees on the basis of race or sex, the company is stepping outside the conditions under which the government agreed to contract with them, and we will hold them accountable."
[10]Python Foundation goes ride or DEI, rejects government grant with strings attached
[11]White House bans 'woke' AI, but LLMs don't know the truth
[12]US govt's science foundation purges 37 divisions, equity unit among casualties
[13]Pentagon celebrates snipping 0.58% from defense budget in IT, DEI cuts
Law firm Latham & Watkins LLP [14]observed that the matter appears to relate to contracts IBM entered into before the 2025 executive order.
The firm also asserted that "IBM received settlement credit for cooperating with DOJ's investigation, including making early factual disclosures, assisting in the calculation of damages and penalties, and voluntarily terminating or modifying the programs and practices at issue."
"The scope of covered conduct and settlement methodology provide insight into the way DOJ is evaluating FCA liability based on alleged discrimination, and underscore DOJ's commitment to aggressively pursue FCA claims," Latham & Watkins advised.
[15]
Another firm, Epstein Becker Green, advised organizations for which "DEI remains a core mission or value" to "stay informed about changes in the law related to DEI and remain 'a step ahead' of any federal DEI investigation or enforcement action."
So perhaps it will be possible to run DEI programs without following IBM's lead. ®
Get our [16]Tech Resources
[1] https://www.federalregister.gov/documents/2025/01/31/2025-02097/ending-illegal-discrimination-and-restoring-merit-based-opportunity
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.whitehouse.gov/presidential-actions/2026/03/addressing-dei-discrimination-by-federal-contractors/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.justice.gov/opa/pr/ibm-pays-17-million-resolve-allegations-discrimination-through-illegal-dei-practices
[7] https://www.justice.gov/opa/media/1435761/dl
[8] https://www.theregister.com/2023/09/21/ibm_age_discrimination/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2025/10/27/python_foundation_abandons_15m_nsf/
[11] https://www.theregister.com/2025/07/24/white_house_wants_no_woke_ai/
[12] https://www.theregister.com/2025/05/09/nsf_axes_37_division/
[13] https://www.theregister.com/2025/04/11/defense_department_cancels_contracts/
[14] https://www.lw.com/en/insights/ibm-pays-in-first-dei-related-false-claims-act-resolution
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ad5kuOw7XsGDslzBAWPvhAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://whitepapers.theregister.com/
Re: Just wait a few months ...
Aladdin Sane
The history of the USA would disagree with that, unfortunately.
Re: The history of the USA would disagree
Anonymous Coward
There are parts of the Republican world (Think Tanks etc) that are openly advocating the idea that women should not be front and center in public life, run corporations, be politicians, hold political office. Instead they should be homemakers and limited to raising children and running kindergartens.
One is also proposing that women lose the right to vote. I guess anyone who is not pure white would be next.
If that is the USA that you want, then keep voting red.
Re: The history of the USA would disagree
Aladdin Sane
Personally, I'm in favour of revoking their independence. 250 years is quite long enough.
graeme leggett
"actively use dangerous, demeaning, and immoral race and sex-based preferences"
Sounds like how Trump picks his cabinet.
wknd
Seems clear that "dangerous" means "dangerous to Trump's fragile ego" here
Pay the US government $17,077,043
abend0c4
An invitation to come back for more.
Re: Pay the US government $17,077,043
Doctor Huh?
"An invitation to come back for more."
Indeed. Kevin Bacon in Animal House: "Thank you, sir! May I please have another?"
Re: Pay the US government $17,077,043
Aladdin Sane
0.17% of last year's profit. A rounding error.
Just wait a few months ...
until after the mid term elections and, hopefully, discrimination in favour of white, male Christians will start to slowly abate until it is eliminated in January 2028.