IBM pays $17M in first anti-DEI False Claims Act settlement

IBM agrees to pay $17 million to settle a False Claims Act lawsuit alleging it used race and gender preferences in government contracting in violation of a Trump executive order banning diversity, equity, and inclusion programs among federal contractors. The settlement is the first of its kind under the Trump administration''s anti-DEI enforcement campaign. The lawsuit was brought under the False Claims Act''s whistleblower provisions, which allow private citizens to sue on behalf of the government and share in any recovery. The complaint alleged IBM set numerical targets by race and gender when hiring for federal contracts, conduct the plaintiffs argued constituted illegal race and sex discrimination. The DOJ under Trump has encouraged use of the False Claims Act to pursue anti-DEI claims against companies doing business with the federal government. The settlement signals that the administration intends to use financial liability to pressure companies to eliminate DEI practices, and is expected to prompt other federal contractors to review their hiring and promotion programs.