IBM entered into a $17 million settlement agreement with the U.S. Department of Justice on Friday to resolve allegations of illegal diversity, equity, and inclusion (DEI) practices. The agreement concludes a legal challenge regarding the company's employment and promotion protocols.
The Department of Justice alleged that IBM used race, color, national origin, or sex as factors in its hiring and promotion processes. Federal prosecutors also claimed that the company utilized funds from its government contracts to fund DEI programs and subsequently sought reimbursement for those costs.
IBM denied any wrongdoing throughout the proceedings. The company stated that the settlement does not constitute an admission of liability or a concession that the DOJ’s claims lacked merit.
"IBM is pleased to have resolved this matter," an IBM spokesperson told TechCrunch. "Our workforce strategy is driven by a single principle: having the right people with the right skills that our clients depend on."
Civil Rights Fraud Initiative
The settlement follows a directive issued last year by former attorney general Pam Bondi. Bondi instructed the DOJ to "investigate, eliminate, and penalize" any DEI programs deemed illegal in private-sector companies that receive federal funds.
As a government contractor, IBM falls under the jurisdiction of these federal oversight efforts. The DOJ recently established the Civil Rights Fraud Initiative to target such practices.
This initiative involves filing claims against recipients of federal funds who "knowingly violate civilly rights laws." The IBM settlement marks the first time the federal government has secured a resolution under this specific initiative.
