Deloitte has agreed to pay $21.5 million to the US government to settle allegations that its diversity, equity and inclusion (DEI) practices breached federal anti-discrimination requirements, in the latest escalation of the Trump administration’s scrutiny of workplace diversity programmes.
The US Department of Justice (DOJ) said the settlement covers alleged conduct between 2017 and August 2026 and resolves claims that Deloitte used race- and sex-based workforce goals in ways that affected compensation, promotions and access to some development programmes.
According to the DOJ, Deloitte business units received monthly reports tracking progress against “demographic goals”. The department also alleged that around 150 partners, principals and managing directors had part of their compensation linked to their contributions towards achieving workforce composition goals, with some potentially losing tens of thousands of dollars annually.
Investigators further alleged that race and sex were considered in promotion decisions to partner and managing director positions, while access to certain training and mentoring programmes was also restricted based on demographic factors.
The case was pursued under the False Claims Act, with the DOJ arguing that Deloitte had falsely certified compliance with federal anti-discrimination requirements applicable to government contractors.
“Government contractors cannot reward or penalise employees based on race or sex, and labelling the practice DEI does not make it lawful,” US Attorney-General Todd Blanche said.
Deloitte denied engaging in discriminatory conduct and said the settlement does not constitute an admission of liability. The firm said it was pleased to resolve the matter to avoid the cost and distraction of prolonged litigation and remain focused on attracting and developing talent.
The settlement also resolves a whistleblower claim filed by the American Alliance for Equal Rights, founded by affirmative-action opponent Edward Blum. The organisation will receive $4.3 million from the recovery, according to the DOJ.
The action is part of a broader US government crackdown on corporate and public-sector DEI initiatives under President Donald Trump, reportedly affecting over 70% of U.S employers. In January 2025, Trump signed an executive order directing federal contractors and subcontractors to eliminate DEI programmes.
The settlement follows a similar agreement involving IBM, which agreed to pay approx. $17 million to the US government to resolve allegations that its DEI practices violated anti-discrimination requirements tied to federal contracts. The IBM settlement, announced by the DOJ earlier this year, also did not constitute an admission of liability by the company.
For HR leaders, particularly those at multinational organisations and companies with US government contracts, the case highlights the growing legal scrutiny around how DEI programmes are designed and implemented. Workforce representation targets that influence pay, promotion or other employment decisions could face heightened regulatory attention in the US.