DOJ Ramps Up False Claims Act Enforcement Against DEI Programs Under Trump-Era Policies

Takeaways

• • The DOJ has launched a Civil Rights Fraud Initiative to enforce DEI-related compliance through the False Claims Act.
  • Federal funding recipients—including universities, healthcare providers, and contractors—face increased scrutiny over civil rights certifications.
  • Organizations should reassess DEI policies and compliance practices to mitigate emerging legal and reputational risks.

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As we have previously examined, one of the earliest actions of the Trump Administration was the issuance of an Executive Order aimed at eliminating diversity, equity, and inclusion (“DEI”) initiatives. A key mechanism in this effort was the use of the False Claims Act (“FCA”), which was repurposed as a tool to enforce federal anti-discrimination laws through government contracting. Although the Executive Order faces significant legal challenges—and its status remains uncertain—the Department of Justice (“DOJ”) has increasingly aligned its enforcement priorities with the Administration’s stance.

This evolving enforcement strategy should be closely monitored by any organization receiving federal funds, whether directly or indirectly. This includes universities, healthcare providers, and other federal contractors and grant recipients. The legal landscape around DEI programs is shifting rapidly, and the risk of exposure tied to federal compliance certifications is increasing accordingly.

DOJ Launches Civil Rights Initiative

The DOJ’s latest move is laid out in a memorandum from Deputy Attorney General Todd Blanche, announcing the creation of the Civil Rights Fraud Initiative. This new Initiative will be jointly led by the Civil Division’s Fraud Section—responsible for FCA enforcement—and the Civil Rights Division, which enforces civil rights laws. According to the memo, the initiative will target FCA claims against entities that “knowingly violate[] federal civil rights laws” while falsely certifying compliance as a condition of receiving federal funds.

U.S. Attorney’s Offices in each judicial district around the country must designate an Assistant U.S. Attorney to support the effort, while the Fraud and Civil Rights Sections in Washington, D.C., are tasked with assembling teams of attorneys to “aggressively” drive enforcement.

Broad Scope, Clear Targets

The scope of this initiative is expansive. The memo emphasizes enforcement against any contractor or grant recipient who misrepresents compliance with civil rights laws. However, its examples—and the broader political context—indicate a particular focus on academic institutions.

The DOJ memo cites universities as potential violators, specifically those that

• • Encourage antisemitism;
  • Fail to protect Jewish students;
  • Permit individuals assigned male at birth to use women’s bathrooms; or
  • Require female athletes to compete against individuals assigned male at birth.

Attorney General Bondi reinforced this focus, explicitly referencing antisemitism in her remarks about the new initiative. Further demonstrating DOJ’s resolve to advance this initiative, it has already opened an FCA investigation into Harvard University’s admission policies.

Yet the memo makes clear that enforcement will not stop with universities. Any DEI program that “assigns benefits or burdens on race, ethnicity, or national origin” may be targeted. The memo further criticizes what it calls the “cosmetic” rollback of DEI efforts, asserting that some institutions continue to implement racially discriminatory policies under the guise of neutrality

Increased Role for Whistleblowers

A central feature of the initiative is DOJ’s explicit encouragement of whistleblower involvement. The memo opens by acknowledging that DOJ cannot detect all instances of  “civil rights fraud” on its own. It highlights the FCA’s qui tam provisions, which allow private individuals (“relators”) to sue on the government’s behalf and share in any monetary recovery.

The message to the private relator bar is unambiguous: “[T]he Department strongly encourages these lawsuits.” In this new environment, any perceived unfair treatment of a member of a majority group could serve as the basis for a high-stakes FCA suit.

What This Means for Federal Funding Recipients

The Trump Administration’s approach to FCA enforcement against DEI-related conduct is now more than just theoretical—it is an operational priority backed by dedicated resources and institutional commitment within DOJ. At the same time, though, legal challenges to these enforcement actions continue in courts across the country, and the outcomes of those challenges could shift the playing field.

Given this uncertainty—and the potential for future administrations to adopt a different, if not diametrically opposed, stance—federal contractors and funding recipients should act now. The rapid and widespread adoption of DEI initiatives during the Biden Administration, reflected in executive orders such as EO 13985 (directing federal agencies to pursue equity in policy and service delivery to underserved communities) and EO 14035 (promoting DEI in the federal workforce)—both revoked by President Trump on January 20, 2025, underscores how volatile federal enforcement priorities can be. What is deemed compliant today may be challenged tomorrow, depending on the political and legal climate.

In such a shifting landscape, organizations should make sure that steps to mitigate current legal risk do not inadvertently create future exposure, and should seek legal counsel to inform how they prioritize adaptable, forward-looking compliance strategies.

If you have any questions about the information in this alert, please contact any of the attorneys listed, or your Dykema relationship attorney.