Missouri AG Sues IBM Over Alleged Violations of State’s Human Rights Act

The IBM logo is pictured in the Garibaldi-Porta Nuova modern district of Milan, Italy, on June 22, 2021. Miguel Medina/AFP via Getty Images

Missouri Attorney General Andrew Bailey, initiated legal action against IBM on June 20, alleging that the company’s employment practices violate state anti-discrimination laws.

The lawsuit, filed in the Circuit Court of St. Louis County, asserts that International Business Machines Corp.’s “diversity modifier” system imposes unlawful employment quotas based on race, color, national origin, sex, and ancestry, tying executive compensation to these quotas.

“It has come to my attention that IBM has adopted an unlawful policy that blatantly favors applicants of a certain skin color over others, and that managers within the company who refuse to comply with said policy face adverse action, including and up to, termination,” Mr. Bailey said in a statement after the suit was filed. “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.”

AG’s Complaint

According to the lawsuit, IBM executives are pressured to meet specific diversity quotas, with their bonuses and job security at stake.

“IBM gives its executives two choices: discriminate or lose your job,” the complaint states, and describes the “diversity modifier” as a mechanism that links executive bonuses to achieving racial, gender, and other demographic quotas.

The complaint details IBM’s alleged quota system through statements from IBM’s CEO, Arvind Krishna, who is reported to have said that IBM’s goals include achieving demographic representation reflective of the general population.

“IBM has made clear its goals of using discriminatory and insufficiently tailored means to bring about discriminatory and unjustifiable ends,” the lawsuit claims.

The lawsuit further asserts that this quota system compels IBM’s executives to make employment decisions primarily based on applicants’ demographic characteristics rather than their qualifications.

This, according to the attorney general, not only discriminates against certain groups but also subjects executives who fail to meet these quotas to adverse employment actions, including reduced bonuses and potential termination.

The attorney general’s office claims that such practices violate Chapter 213 of the Revised Statutes of Missouri, which prohibits discriminatory employment practices.

“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,” Mr. Bailey, a Republican, wrote in the lawsuit.

The complaint also references two recent Supreme Court cases, where the court ruled that race-based affirmative action programs in college admissions violate the Equal Protection Clause of the 14th Amendment. The suit says these cases bolster the argument that racial quotas and balancing are “patently unconstitutional” and also violates Missouri law.

Specific Allegations and Requested Action

The suit contains several alleged violations of the state’s law, including inciting, aiding, or coercing discriminatory practices; limiting, segregating, or classifying employment applicants; unlawful printing or circulation; improper employment inquiries and application forms; failing to hire individuals; and retaliation against those opposing these discriminatory practices.

They make the allegations of violating the law using evidence, primarily statements made by Mr. Krishna in a video that was released on X in late 2023.

The video, which features Mr. Krishna along with other executives—including Paul Cormier, chairman and former CEO of Red Hat, and Allison Showalter, senior director of corporate communications at Red Hat—captures Mr. Krishna openly discussing IBM’s diversity hiring practices. It was part of an internal meeting and was leaked to the public.

In the footage, Mr. Krishna is seen responding to questions about IBM’s efforts to promote diversity, equity, and inclusion within its executive ranks.

He candidly acknowledges that IBM employs a quota system for increasing the representation of underrepresented minorities among its executives. Specifically, he mentions that IBM’s goal is to move forward by 1 percent each year in terms of hiring and promoting black and Hispanic individuals, as well as increasing gender diversity.

Mr. Krishna elaborates that executive bonuses are directly tied to meeting these diversity targets. He states that executives receive a “plus” on their bonuses if they achieve the desired demographic shifts, but face penalties if they fail to do so.

The lawsuit argues that these statements confirm IBM’s use of discriminatory quotas, which the attorney general contends violate Missouri’s anti-discrimination laws. By tying executive compensation to the attainment of specific demographic goals, IBM allegedly compels its leaders to engage in unlawful employment practices, thereby perpetuating systemic discrimination within the company.

The lawsuit seeks a permanent injunction to prohibit IBM from using its “diversity modifier” quotas in Missouri. The attorney general’s office also requests additional relief to ensure compliance with Missouri’s anti-discrimination laws and to protect the rights of Missouri citizens from systemic discrimination.

IBM is a publicly traded corporation with offices worldwide, including two in the state of Missouri. In 2023, IBM’s worldwide employment stood at about 282 thousand people, according to the suit.

The Epoch Times contacted IBM for comment.