{"id":10406,"date":"2026-04-22T10:00:49","date_gmt":"2026-04-22T10:00:49","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/doj-announces-first-fca-settlement-over-dei-practices\/"},"modified":"2026-04-22T10:00:49","modified_gmt":"2026-04-22T10:00:49","slug":"doj-announces-first-fca-settlement-over-dei-practices","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/doj-announces-first-fca-settlement-over-dei-practices\/","title":{"rendered":"DOJ Announces First FCA Settlement Over DEI Practices"},"content":{"rendered":"\n
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On April 10, 2026, IBM and the U.S. Department of Justice entered into a settlement agreement<\/a> to resolve the DOJ\u2019s allegations that IBM violated the False Claims Act (FCA) through its diversity, equity and inclusion (DEI) practices.\u00a0Without admitting liability, and denying wrongdoing, IBM agreed to pay the DOJ approximately $17 million to resolve all claims alleging the company \u201cfail[ed] to comply with anti-discrimination requirements in its federal contracts due to practices\u201d that allegedly \u201ctook race, color, national origin, or sex into account when making employment decisions.\u201d This is the first resolution secured by the Civil Rights Fraud Initiative, which was formed in March 2025 (discussed here).<\/p>\n

Alleged DEI-Related Practices at Issue<\/h3>\n

The DEI practices challenged by the DOJ include:<\/p>\n

(1) Tying compensation to achieving certain demographic targets, including using a \u201cdiversity modifier that tied bonus compensation to achieving demographic targets\u201d;<\/p>\n

(2) Taking race, color, national origin or sex into account as part of employment decisions, including through use of \u201cdiverse interview slates\u201d and \u201cdiverse sourcing\u201d;<\/p>\n

(3) Using race and sex demographic goals for business units and making employment decisions to achieve those goals; and<\/p>\n

(4) Offering certain training, partnerships, mentoring, leadership development programs, educational opportunities or resources only to certain employees, with eligibility, participation, access or admission limited on the basis of race, color, national origin or sex.<\/p>\n

The resolution covered the period of January 1, 2019 (so prior to President Trump\u2019s issuance of Executive Order 14173 entitled \u201cEnding Illegal Discrimination and Restoring Merit-Based Opportunity<\/a>\u201d (discussed here)) to present. Of the approximate $17 million settlement, approximately $8.2\u00a0million constituted restitution. The agreement alleges that IBM \u201callocated costs to its federal government contacts relating to\u201d the challenged practices. Notably, the DOJ stated that IBM received \u201ccooperation credit,\u201d given the \u201csignificant steps\u201d taken by the company, including the implementation of \u201cvoluntary remedial measures,\u201d by terminating and\/or modifying the policies at issue, and making \u201cearly disclosure of facts relevant to the government\u2019s investigation.\u201d<\/p>\n

This settlement further underscores the increased scrutiny being placed on DEI-related practices, particularly for federal contractors, together with DOJ\u2019s intent to seek recovery of any costs allocated to federal contracts in connection with challenged DEI practices.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

On April 10, 2026, IBM and the U.S. Department of Justice entered into a settlement agreement to resolve the DOJ\u2019s allegations that IBM violated the False Claims Act […]<\/p>\n","protected":false},"author":1,"featured_media":10407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1444,134,1343,996,553,399],"class_list":["post-10406","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-announces","tag-dei","tag-doj","tag-fca","tag-practices","tag-settlement"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10406","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10406"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10406\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10407"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}