Compliance Stuff

On Friday, April 10, 2026, the Department of Justice (“DOJ”) announced a $17 million False Claims Act (“FCA”) settlement with International Business Machines (“IBM”), based on the company’s alleged violations of federal anti-discrimination laws. The settlement is the first under the DOJ’s  Civil Rights Fraud Initiative,  created last May with the objective of investigating and prosecuting “illegal DEI” practices, primarily through an FCA lens. Coupled with a new  Executive Order —issued on March 26—that imposes contract prohibitions on “racially discriminatory DEI activities” in federal government contracts and subcontracts, the IBM settlement signals an escalation in the government’s focus on DEI programs and employment policies. The DOJ Press Release and Settlement Agreement   The Alleged “Covered Conduct” Identifies Specific Problematic Practices.  DOJ alleged that IBM improperly made employment decisions based on protected characteristics t hrough specific ...

 State Attorney General follows through on threat.  Last summer, shortly after the U.S. Supreme Court’s decision in Students for Fair Admissions v. President & Fellows of Harvard and Students for Fair Admissions v. University of North Carolina, thirteen “red state” Attorneys General warned the nation’s Fortune 100 companies that they should stop “reverse” discriminating against individuals on the basis of race or face the consequences. In their letter, the state AGs stated, “Sadly, racial discrimination in employment and contracting is all too common among Fortune 100 companies and other large businesses. In an inversion of the odious discriminatory practices of the distant past, t oday’s major companies adopt explicitly race-based initiatives which are similarly illegal . These discriminatory practices include, among other things, explicit racial quotas and preferences in hiring, recruiting, retention, promotion, and advancement. . . .  The warning letter c onclud...