DOJ Announces Civil Rights Fraud Initiative for Investigating DEI Programs of Federal Contractors and Grantees

The U.S. Department of Justice (“DOJ”) recently announced the creation of the Civil Rights Fraud Initiative (the “Initiative”). The Initiative will use the False Claims Act (“FCA”) to investigate and pursue claims against any recipient of federal funds that “knowingly violates federal civil rights laws,” with a particular emphasis on bringing claims against entities engaging in diversity, equity, and inclusion (“DEI”) practices that may violate federal anti-discrimination laws. This stems from an early Trump Administration Executive Order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Executive Order”), which first linked violations of federal anti-discrimination laws with potential enforcement under the FCA.

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New Executive Order Targets Disparate-Impact Liability in Federal Regulations

In recent months, the Trump administration has issued a series of Executive Orders, many of which may have vast implications for employment policies and procedures. Recently, the Trump administration issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (“EO”) targeting disparate impact liability as “all but requir[ing] individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability”.  This alert summarizes the potential impact of this EO for employers.  

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