Executive Order Seeks To Impose False Claims Act Liability For Federal Contractors' DEI Programs

On January 21, 2025, President Trump issued an executive order titled “ Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Order), which seeks to eliminate diversity, equity, and inclusion (DEI) policies and programs across the federal government and within private industries that do business with the federal government.¹ Part of a broader suite of DEI-related executive actions,² the Order reverses federal contracting requirements—dating back nearly 60 years—that obligated federal contractors and subcontractors to implement affirmative action programs, and it imposes new requirements targeted at organizations with DEI programs.³ This alert summarizes the Order's application to federal contractors and grant recipients, including its potentially significant implications under the False Claims Act (FCA).