Accounting firm Deloitte will pay $21.5 million to settle a US Department of Justice probe into its diversity, equity and inclusion practices, resolving an investigation conducted under a federal initiative established during President Donald Trump’s second term to challenge DEI policies.
The settlement was reached through the Justice Department’s “Civil Rights Fraud Initiative”, a unit formed last year to pursue DEI-related policies using a civil anti-fraud law. The agreement marks one of the latest actions arising from the Trump administration’s broader effort to dismantle or restrict diversity programmes across public and private organisations.
The administration has targeted institutions ranging from government agencies to universities over DEI practices. Civil rights advocates argue that such policies help address historic inequities affecting marginalised groups, including women, the LGBT community and ethnic minorities. The White House, however, portrays DEI programmes as anti-merit and discriminatory towards groups such as white people and men.
Trump has signed executive orders directing federal contractors and subcontractors to eliminate DEI practices, while civil rights groups have argued that such measures are rolling back social progress. In response to the administration’s policies, many US companies have scaled back or modified their diversity programmes.
The Justice Department said on Tuesday that business units within Deloitte received monthly summaries tracking “demographic goals”. It also alleged that Deloitte’s Partners, Principals and Managing Directors were evaluated, in part, according to their contributions towards achieving the company’s workforce composition goals.
According to the DOJ, those DEI goals were aimed at improving representation of Black and Hispanic communities and affected promotion decisions. The allegations placed Deloitte’s internal workforce policies at the centre of the government’s investigation into whether diversity targets had crossed into discriminatory employment practices.
Deloitte has denied engaging in discriminatory conduct. The settlement agreement released on Tuesday explicitly states that it does not amount to an admission of liability. The company said it was pleased to resolve the matter in order to “avoid the cost and distraction of protracted litigation”.
The settlement also resolves claims brought by the American Alliance for Equal Rights, a group founded by affirmative action opponent Edward Blum. The claims were filed under the US False Claims Act, which permits whistleblowers to sue companies on behalf of the government to recover taxpayer funds allegedly paid out on the basis of false claims.
The law also provides financial incentives for whistleblowers by allowing them to receive a share of any recovery. Under the Deloitte settlement, Blum’s group will receive $4.3 million, the Justice Department said.
The case illustrates the increasingly consequential legal and political dispute over corporate DEI policies in the United States. For the Trump administration, the use of civil anti-fraud enforcement represents another mechanism for challenging diversity programmes, while opponents view the broader campaign as a retreat from efforts to address longstanding inequalities.
For Deloitte, the $21.5 million settlement closes the government probe without an admission of liability, but the case places its workforce policies within a rapidly changing US regulatory and political environment in which corporate diversity practices face significantly greater scrutiny.
