The U.S. Department of Justice announced a $17,077,043 settlement with International Business Machines Corporation, resolving allegations the company violated the False Claims Act by failing to comply with anti-discrimination requirements tied to federal contracts.
According to the Justice Department, federal contractors must certify they do not discriminate against employees or applicants based on race, color, national origin, or sex. The government alleged IBM failed to meet those obligations and knowingly maintained employment practices it contends were discriminatory.
The settlement marks the first resolution under the Civil Rights Fraud Initiative, launched in May 2025 by Acting Attorney General Todd Blanche. Officials said the initiative is aimed at enforcing civil rights protections in federally funded work.
Federal investigators alleged IBM used practices such as tying bonus compensation to demographic targets, modifying interview criteria based on race or sex, and setting demographic goals for business units. The government also claimed certain training, mentorship, and advancement programs were limited based on race or sex.
DOJ officials emphasized that companies receiving taxpayer funds must ensure employment decisions are based on merit. Associate Attorney General Stanley Woodward said the case reflects the department’s commitment to enforcing anti-discrimination laws in federal contracting.
IBM received credit for cooperating with the investigation, including making early disclosures and taking remedial actions. The company reportedly modified or ended certain programs identified in the inquiry.
The settlement resolves allegations only, and there has been no determination of liability.
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