WASHINGTON, D.C. – Today, America First Legal (AFL), along with JW Howard Attorneys, LTD, filed a federal lawsuit in the U.S. District Court for the Central District of California against International Business Machines Corporation (IBM), alleging that the company engaged in illegal race, sex, and age discrimination against AFL’s client when it terminated him following a pre-textual Performance Improvement Plan in furtherance of its stated “diversity, equity, and inclusion” (DEI) policies.
The complaint tells the story of John Loeffler, a 64-year-old white male with a nearly decade-long track record of excellence at IBM. The complaint alleges that he was targeted for termination to advance IBM’s internal DEI quotas—quotas tied directly to executive bonuses and job security. In fact, the DEI culture was so pervasive that on a June 2023 Webex call, IBM leadership allegedly praised the influx of “Black and Brown faces” on the team, directly linking these demographic changes to manager bonuses and job security.
According to the lawsuit, IBM:
Denied Loeffler commissions he earned on a $30 million government contract he had worked on for two years.
Reassigned him to a geographic sales region in which IBM had historically done very little business and set sales expectations divorced from the reality of both the timeline on which contracts could be secured and the size of contracts that could be secured.
Placed Loeffler on a Performance Improvement Plan (PIP) with unattainable targets based on retroactive changes.
Ultimately terminated Loeffler’s employment citing his inability to meet his targets after denying him his rightfully earned commissions.
After terminating Loeffler, IBM assigned his job responsibilities to two younger, non-white employees.
And while IBM told Loeffler that the attribution for the large government contract was going to a different business unit, others on his team (who did less work on the project than he did), including racial minorities, were credited with work and awarded commission for the project, while he was denied it. IBM then assigned Loeffler to a sales region where the company had no history of doing business and told him he had six weeks to land 70 percent of his target incentive. The lawsuit alleges that IBM intentionally manipulated these assignments to ensure Loeffler’s failure while creating a pathway to success for his partner, thereby satisfying internal diversity metrics.
Public disclosures further support the claims. In 2021, undercover video footage captured IBM CEO Arvind Krishna calling for explicit racial and gender quotas and explaining that executive bonuses would be tied to achieving them. IBM’s own corporate documents confirm this. Its 2022 Annual Report described a “diversity modifier” as part of executive compensation. Its 2023 ESG Report reaffirmed that bonuses remain tied to workforce demographics. Mr. Loeffler was terminated in November 2023.
Statement from Gene Hamilton, America First Legal President:
“Racial discrimination is always wrong. Yet sadly, our client’s experience—as detailed in the complaint—is painfully familiar to countless Americans across the country. Employers need to make employment decisions based on merit, not based on arbitrary quotas that distinguish between Americans based on the color of their skin. We will fully vindicate our client’s rights in this case and will not cease fighting for equality in the United States.”
Statement from Laura Stell, America First Legal Counsel:
“IBM once stood as a symbol of American innovation—powering the moon landing, advancing modern computing, and embodying the very best of American enterprise.
It is a profound tragedy that this iconic company has lost its way. By abandoning merit and equal opportunity, IBM has become a cautionary tale of what happens when corporations place ideology above the rule of law. Discrimination based on age, race, or sex is not progress—it is a betrayal of the principles that built this nation.
When a company as emblematic as IBM turns its back on merit, it sets the tone for all of corporate America. AFL will hold IBM accountable—and in doing so, help safeguard the future of American excellence.”
Following Wood v. Red Hat (an IBM subsidiary) and Dill v. IBM, this is AFL’s third lawsuit on behalf of a client against IBM for its discriminatory employment practices, which—as described by CEO Arvind Krishna—target white men for removal from the company.
AFL will continue to fight corporate policies across America that systemically discriminate against employees in the name of “diversity, equity, and inclusion.”
Read the complaint here.
Track case updates and filings here.
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Photo Credit / Adobe Stock: SKIMP Art
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