Red state sues tech giant IBM over diversity 'quotas'

FIRST ON FOX: The state of Missouri has filed a lawsuit against the technology giant, International Business Machines Corporation (IBM), for unlawful practices in allegedly requiring racial and gender quotas in its hiring and promotion structures for employees. 

Missouri Republican Attorney General Andrew Bailey filed suit Thursday against the company, alleging that such practices are a violation of the Missouri Human Rights Act. 

"It has come to my attention that IBM has adopted an unlawful policy that blatantly favors applicants of a certain gender or skin color over others, and that managers within the company who refuse to comply with said policy faces adverse action, including and up to, termination. Discrimination in the workplace violates both state and federal law, which is why I am filing this lawsuit," Bailey said. 

"Missourians deserve answers as to why one of the largest technology and consulting companies in the world, with offices based in Missouri, is discriminating against both prospective and current employees," he said. 

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The lawsuit filed in the circuit court of St. Louis County, alleges that when making employment decisions, IBM uses a "diversity modifier," a standard requiring the company to annually obtain certain hiring quotas based on race, color, national origin, sex or ancestry. 

"If an IBM executive meets the quotas, IBM gives them the carrot: a plus on their bonus. But if he or she fails to meet it, IBM swings the stick: they lose part of their bonus and, eventually, their job," the suit claims. 

A spokesperson for the company denied the claims, saying in a statement to Fox News Digital, "IBM does not use quotas and never has, and any suggestion otherwise is false."

IBM is one of the largest technology companies headquartered in New York and has been in operation for over 100 years. In 2023, IBM employed around 282,000 people worldwide.

"IBM has made clear its goals of using discriminatory and insufficiently tailored means to bring about discriminatory and unjustifiable ends," the suit states. 

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"Plaintiff, the State of Missouri, brings this action to put an end to IBM’s unlawful practices which have affected, are affecting, and, unless stopped, will harm Missourians," it says. 

The lawsuit states that "tying the quota system to bonus compensation serves not as a mere incentive to reach preferred demographics, but also as a cudgel against those who do not fall in line."

The suit states that IBM CEO Arvind Krishna "recognized that obtaining these quotas would necessarily mean fewer opportunities for other groups not considered ‘underrepresented minorities' by IBM."

"Through the use of its ‘diversity modifier,’ IBM seeks to unfairly change the balance in favor of some races, colors, national origins, ancestries, and one sex but not the others," the lawsuit claims.

"IBM’s hiring is, thus, ‘zero-sum’ because ‘[a] benefit provided to some applicants [and employees] but not to others necessarily advantages the former group at the expense of the latter,'" the lawsuit states, citing from the recent Supreme Court decision, Students for Fair Admission v. Harvard. 

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That case, decided last summer, outlawed discriminatory practices in higher education admissions – a practice known as affirmative action. While that case dealt with American colleges, legal experts have said it would change the legal liability landscape beyond campuses, and change the way other corporations and businesses pursue diversity, equity and inclusion – or DEI – practices.

The Show Me State's lawsuit seeks to "permanently enjoin IBM and all its employees, officers, and agents from using IBM’s ‘diversity modifier’ quotas."

"It is an unlawful discriminatory practice for an employer to fail or refuse to hire any individual, or otherwise to discriminate against any individual with respect to his or her compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, national origin, sex, or ancestry," the lawsuit states. 

IBM did not immediately respond to FOX Business' request for comment.