Deloitte will pay nearly $21.5 million to settle allegations that it defrauded the federal government by considering race and sex in hiring, promotion, and staffing decisions.
According to an August 25, 2026, news release from the U.S. Department of Justice, the multinational professional services firm tracked diversity across its business units and setting race- and sex-based demographic goals that affected hiring and promotion decisions.
Deloitte tracked business units’ progress toward demographic workforce goals through monthly, color-coded summaries, the news release states. Senior leaders were also evaluated partly on their contributions to these goals, and for two years, compensation for approximately 150 senior leaders could be affected if their units did not meet them.
“Merit drives opportunity and promotion. Not someone’s sex or race,” Associate Attorney General Stanley E. Woodward Jr. said in a statement. He described the settlement as “yet another example of this Department’s commitment to eliminating woke, unconstitutional practices from American workplaces.”
Deloitte did not admit liability and denied the allegations as part of the settlement agreement.
Inside The Trump Administration’s DEI Crackdown
Deloitte’s settlement comes as the Trump administration continues to enforce the False Claims Act to dismantle diversity, equity, and inclusion (DEI) initiatives at major U.S. companies that contract with the federal government.
The False Claims Act holds individuals or companies liable for knowingly submitting false claims to the government, with potential consequences including triple the government’s damages plus inflation-adjusted penalties, per the Justice Department’s website.
Under the second Trump administration, the Justice Department has advanced a new theory that federal contractors that consider DEI in their employment practices can also violate the False Claims Act.
“When a contractor misrepresents its compliance with federal anti discrimination law to secure federal funds, it violates the conditions for receiving those funds and risks liability under the False Claims Act,” said Assistant Attorney General Brett A. Shumate in the press release. Shumate emphasized that the Justice Department “will aggressively enforce these requirements, and companies who take taxpayer funds while engaging in illegal discrimination will be held accountable.”
Like Deloitte, IBM And PayPal Faced False Claims Act Allegations
IBM was the first private-sector company to settle allegations under this approach. As AFROTECH™ previously reported, the technology company agreed in April 2026 to pay $17 million to resolve claims that it failed to comply with federal antidiscrimination requirements by considering DEI in hiring, career advancement, and bonus decisions.
The government alleged that IBM used “diverse interview slates” and other practices to identify candidates for hiring, transfers, and promotions, while setting demographic goals that factored into employment decisions. It also claimed IBM restricted certain training, mentoring, leadership development, partnerships, and educational opportunities to specific employee groups.
PayPal also reached a deal with the Justice Department in May, agreeing to forgo $30 million in transaction fees to resolve an investigation into its lending practices, AFROTECH™ noted. The financial services company allegedly created a discriminatory investment program that favored Black and minority-owned businesses.
The investigation stemmed from allegations that PayPal’s Economic Opportunity Fund, launched in 2020 to support Black and minority-owned businesses, violated federal civil rights laws.
“This Department of Justice is delivering on President Trump‘s vow to root out illegal DEI from every corner of corporate America,” Acting Attorney General Todd Blanche said at the time. “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”
