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ARTICLE · 17 FEBRUARY 2025

DEI And Government Contractors: A High-Stakes Shift

Proskauer Rose LLP
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While much of the focus on President Trump's recent Executive Order on Ending Illegal Discrimination and Restoring Merit-Based Opportunity (the "EO") has been on its elimination...

United StatesGovernment, Public Sector
Guy Brenner
Guy Brenner
Olympia Karageorgiou
Olympia Karageorgiou
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While much of the focus on President Trump's recent Executive Order on Ending Illegal Discrimination and Restoring Merit-Based Opportunity (the "EO") has been on its elimination of race and sex-based affirmative action requirements for federal contractors, another provides carries even greater potential implications. The EO also introduces new contractual obligations related to diversity, equity, and inclusion ("DEI") efforts and signals an intent to use the False Claims Act (FCA) as a tool to target government contractors for what it views as "illegal" DEI initiatives—potentially subjecting those companies to substantial financial and even criminal penalties.

Government contractors are no strangers to being test subjects for Executive policy initiatives. Past administrations have leveraged the federal government's immense purchasing power to enforce requirements that couldn't gain traction in Congress. From paid leave and minimum wage mandates to

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