Deloitte to Pay $21.5 Million to End Trump Administration DEI Probe
Deloitte has agreed to pay $21.5 million to settle claims by the Trump administration that it discriminated against employees and job applicants on the basis of race or sex.
The settlement is part of a wide-ranging Justice Department probe of diversity, equity and inclusion initiatives at major companies with federal contracts. The administration is investigating the initiatives under the False Claims Act, a federal law used to pursue contractors suspected of defrauding the government.
In April, IBM agreed to pay $17 million to resolve claims that its DEI programs violated the False Claims Act. It was the first such settlement since the Justice Department established a task force last year to use the anti-fraud law in this area.
Deloitte denied it engaged in the conduct alleged by the government and did not admit liability as part of the settlement.
“We are pleased to have resolved this matter to avoid the cost and distraction of protracted litigation, allowing us to remain focused on attracting and developing exceptional talent with the skills and capabilities our clients rely on every day,” Deloitte told USA TODAY in a statement.
What the Government Alleged
Federal contracts require contractors to provide equal opportunity in the workplace, and companies must certify they don’t discriminate on the basis of race or sex. In the Deloitte case, the government alleged the accounting firm took race or sex into account when making hiring, promotion and staffing decisions.
Business units received monthly summaries tracking demographic goals, and Deloitte managers were evaluated on their contributions toward reaching those goals, the DOJ said. The department also said Deloitte limited participation in certain training, mentorship, leadership development and educational opportunities to employees of a certain sex or race.
“Government contractors cannot reward or penalize employees based on race or sex — and labeling the practice DEI does not make it lawful,” Attorney General Todd Blanche said in a statement.
A joint effort with the U.S. Attorney’s Office for the Northern District of Texas, the settlement means the Alliance for Equal Rights, the whistleblower group in the case, will receive a $4.3 million payout. Earlier this year, the DOJ said it had seen a “rapid increase” in whistleblower complaints. A Justice Department bounty program gives tipsters a cut of False Claims Act proceeds.
“The Alliance brought this case on behalf of its members,” Edward Blum said in a statement. “The comprehensive settlement agreements reached by the United States, Florida and Indiana speak for themselves.”
Separately, Indiana Attorney General Todd Rokita announced that Deloitte would pay $1.2 million to settle allegations it engaged in unlawful DEI practices as a state contractor.
Why It Matters to Federal Contractors
Just hours after taking office, President Donald Trump issued executive orders aimed at dismantling diversity programs and directed federal contractors to end what his administration called “illegal DEI discrimination.” Fearing lawsuits and the loss of government contracts, dozens of large companies rolled back or eliminated DEI programs.
In May 2025, the DOJ signaled its intention to investigate federal contractors and grant recipients by creating the Civil Rights Fraud Initiative, which threatens legal action under the False Claims Act.
Damages and penalties can quickly add up in False Claims Act lawsuits. Defendants can be held liable for three times the damages the government alleges, and the DOJ has encouraged whistleblowers to file lawsuits on the government’s behalf and potentially receive a portion of any recovery.
The threat of an investigation can also create business risks, including reputational damage and shareholder lawsuits, lawyers previously told USA TODAY.
This article originally appeared on USA TODAY. Reporting by Jessica Guynn, USA TODAY. USA TODAY Network via Reuters Connect.
