Trump Administration Announces New Enforcement Efforts Targeted at DEI

This week, the Trump administration escalated its enforcement strategy for ending unlawful Diversity Equity and Inclusion (DEI) initiatives in the private sector[1] Consistent with the policy objectives stated in Executive Order (EO) 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, the Department of Justice (DOJ) announced a new Civil Rights Fraud Initiative. The initiative, which focuses on federal contractors and universities, “will utilize the [FCA] to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” The initiative will be led by the DOJ’s Civil Fraud Section and the Civil Rights Division.

EO 14173 also required Attorney General Pam Bondi to submit a report by no later than May 21 outlining a strategic enforcement plan for eliminating DEI in the private sector, including recommendations for civil enforcement investigations against “the most egregious DEI practitioners.” While the strategic enforcement plan has not been publicly released, companies can expect an increase in enforcement activity as a result of both the strategic enforcement plan and the new Civil Rights Fraud Initiative.

DOJ’s Civil Rights Fraud Initiative

As we’ve previously covered here and here, EO 14173 requires federal contractors to certify that they do “not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws” and that “compliance in all respects with all applicable Federal anti-discrimination laws is material” for purposes of the FCA. Federal agencies have required recipients of federal funds to make these FCA certifications after the issuance of the EO in January.

As explained in a memorandum by Deputy Attorney General Todd Blanche, the newly created Civil Rights Fraud Initiative intends to “aggressively pursue” FCA liability for false certifications of compliance with civil rights laws. The memo states that the FCA applies “whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through [DEI] programs that assign benefits or burdens on race, ethnicity, or national origin.”

The memorandum focuses on universities in particular, suggesting that a university could face FCA liability “when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into Women’s bathrooms or requires women to compete against men in athletic competitions.” While universities are singled out for enforcement, Blanche’s memo is clear that any entity that receives federal funds and certifies compliance with civil rights laws could be a target.

In addition to civil FCA investigations, Blanche notes that the Civil Fraud Section and Civil Rights Division will engage with the Criminal Division, suggesting that the government may pursue criminal investigations in certain cases. AG Bondi’s February 5, 2025 memo to DOJ employees similarly requested proposals for criminal investigations relating to illegal DEI policies and programs.

Blanche also “strongly encourages” private parties to avail themselves of the FCA’s qui tam provisions. His announcement directs individuals with knowledge of suspected civil rights violations to a website with instructions for notifying the appropriate federal authorities.

This initiative is likely to result in a sharp increase in FCA investigations and litigation initiated by both by the government and private qui tam relators. Indeed, shortly before this announcement, the DOJ notified Harvard that it is investigating whether Harvard fraudulently received grant funding in violation of the FCA by failing to comply with the Supreme Court’s decision in SFFA v. Harvard.

While the DOJ and relators are likely to face significant challenges to establishing FCA liability relating to DEI initiatives—particularly with respect to scienter and materiality—the expense and operational disruptions resulting from FCA investigations, and the ensuing litigation, present a substantial and unique risk for federal contractors and universities. The DOJ has wide discretion over the scope of FCA investigations and there are limited options for ending or challenging the scope of an investigation prior to the commencement of litigation.

Strategic Enforcement Plan

AG Bondi’s strategic enforcement plan for ending illegal DEI in the private sector—which was due May 21—also signals an impending increase in enforcement activity. While the strategic enforcement plan has not been publicly released, the EO requires it to identify the “key sectors of concern within each agency’s jurisdiction,” “the most egregious and discriminatory DEI practitioners in each sector of concern,” and “up to nine civil compliance investigations” per agency.

It is not yet clear which companies and organizations will be identified for civil compliance investigations, or if the administration will publicly name the targets, but the EO directs agencies to focus on large organizations, including publicly traded companies and foundations with more than $500 million in assets. In anticipation of the strategic enforcement plan, many companies have been preparing for a wave of enforcement activity.

Even before the deadline for the strategic enforcement plan, some federal agencies launched investigations of companies’ DEI policies and practices. The Federal Communications Commission (FCC) has announced investigations of Comcast and Disney, and the Equal Employment Opportunity Commission (EEOC) has requested information about law firms’ hiring practices. And, in addition to the DOJ’s recently announced FCA investigation, the Department of Education, the EEOC, the Department of Health and Human Services, and Department of Homeland Security also have pending investigations of Harvard.

Recommendations

In response to the anticipated ramp up in enforcement activity, federal contractors, universities and employers should work with legal counsel to evaluate current DEI policies, evaluate legal challenges to the administration’s enforcement initiatives and monitor ongoing enforcement activity. Any organization that receives a Civil Investigative Demand or a subpoena seeking information about DEI policies and initiatives should immediately retain experienced counsel and begin evaluating the scope of the requests and developing a legal strategy to respond.