IBM to pay $17 million to settle US government probe over DEI

By Kanishka Singh

WASHINGTON, April 10 (Reuters) – IBM has agreed to pay $17 million to settle a U.S. government probe over the firm’s diversity, equity and inclusion practices, which President Donald Trump’s administration has cracked down on during his second term in office. 

The settlement marks the first resolution from the U.S. Department of Justice’s unit formed last year called the “Civil Rights Fraud Initiative” to crack down on DEI policies using a civil anti-fraud law.

Trump has targeted public and private organizations – from ​government agencies to private universities – over DEI practices that civil rights advocates say help address historic ⁠inequities for marginalized groups like women and ethnic minorities.

In a settlement signed by the DOJ and IBM, the U.S. government alleged that IBM’s practices included using a “diversity modifier” that “tied bonus compensation to achieving demographic targets,” among other claims. 

The settlement also said IBM terminated or modified various programs and policies, but that the company denied engaging in unlawful conduct.

“This agreement is neither an admission of liability by IBM nor a concession by the United States that its claims are not well-founded,” the agreement said.

The White House casts DEI as anti-merit and ​discriminatory against groups like white people and men. Trump has signed executive orders asking federal contractors ‌and subcontractors to eliminate DEI.

Many U.S. companies scaled back or modified diversity policies after Trump’s orders.

(Reporting by Kanishka Singh and Jasper Ward in Washington; editing by Michelle Nichols and David Gaffen)