Executive Order Seeks To Impose False Claims Act Liability On Government Contractor And Grantee DEI Programs

Summary

On January 21, 2025, the Trump Administration issued an executive order entitled "Ending Illegal Discrimination and Restoring Merit Based Opportunity" ("EO"). The stated purpose of the EO is to direct the federal government to enforce the civil rights laws by taking action against "illegal" preferences and discrimination, including measures taking aim at private sector diversity, equity, and inclusion ("DEI") policies and programs. As we highlighted, the EO has significant implications for federal contractor affirmative action obligations and serves as a strong signal of the Trump administration's increased scrutiny toward private sector DEI programs. Importantly, the EO also seeks to impose False Claims Act liability on federal contractors and grant recipients who maintain DEI programs that run afoul of federal civil rights law.