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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DEI – Grant Recipients and Contractor Update

We have continued to track the rapidly evolving circumstances surrounding the Trump Administration’s Executive Orders targeting diversity, equity, and inclusion (“DEI”) programs. Recent developments include a reported retroactive review of affirmative action plan submissions by federal contractors, and the issuance of a nationwide temporary restraining order that blocks the U.S. Department of Labor from enforcing a certification requirement against grant recipients and federal contractors.

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DEI Guidance from EEOC & DOJ

Yesterday, the Equal Employment Opportunity Commission released two guidance documents focusing on Diversity, Equity, and Inclusion (“DEI”).  The first, entitled “What You Should Know About DEI-Related Discrimination at Work” largely applies general standards from Title VII and related case law to DEI programs in a broad sense, with some specific DEI-related practices highlighted. The second guidance document, “What To Do If You Experience Discrimination Related to DEI at Work” was released in conjunction with the Department of Justice and provides similar information, but in a more compact form. These guidance documents are consistent with the Executive Orders issued by the Trump Administration earlier this year regarding “illegal DEI” and confirm that examining DEI programs of private sector employers remains a priority of the administration.

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