First DEI Settlement Under the Civil Rights Fraud Initiative Targets Conduct Pre-Dating the Current Administration
On April 10, 2026, the Department of Justice (“DOJ”) announced a $17 million civil False Claims Act (“FCA”) settlement with IBM Corporation. This is the first FCA settlement reached under the Civil Rights Fraud Initiative, which was created in May of 2025 and tasked with using the FCA as a tool to prosecute federal contractors that engage in diversity, equity, and inclusion (“DEI”) programs that violate federal anti-discrimination laws.The IBM settlement offers insight into what federal contractors can expect from DOJ enforcement of the Administration’s campaign against DEI. DOJ appears to be casting a wide net with its investigations, targeting conduct that took place years before this Administration and may have been considered legal at the time it occurred.Background: The Administration’s Campaign Against DEIThe Civil Rights Fraud Initiative is part of the current Administration’s broader effort to eliminate DEI practices it considers discriminatory from the federal government, federal procurement, and the private sector generally.
