IBM's FCA Deal Creates Unease Over DEI Enforcement Scope

Government Contracts attorney Jeremy Burkhart was quoted in a Law360 recapping industry reaction to the government's settlement with IBM regarding alleged False Claims Act (FCA) violations stemming from workforce diversity programs. In the $17 million settlement, announced April 10, 2026, the U.S. Department of Justice (DOJ) cites practices that include tying bonus compensation to achieving demographic targets and altering interview eligibility based on certain characteristics, although IBM does not admit liability or wrongdoing. Notably, some of the conduct described dates to 2019, prior to the inauguration of the Trump Administration. Practitioners interviewed by Law360 pointed to this lookback period as putting contractors on notice and said the agreement tracks with President Donald Trump's stated intentions to use the FCA to bring claims against federal fund recipients that promote policies it thinks violate federal antidiscrimination laws. Mr. Burkhart specifically commented on a clause allowing the government to pursue suspension or debarment against IBM and predicted future FCA cases focused on employee-related programs, which could lead to an uptick in settlements like this one.

"Generally speaking, that's unlikely when you have a settlement like this...but I think that the government views suspension and debarment as part of its toolkit for enforcing what it views as antidiscrimination laws," he explained. "So I think that is going to be leveraged more and more moving forward."

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