DOJ provides insights on False Claims Act investigations related to DEI and antidiscrimination

In comments made on February 19 2026 during the Federal Bar Association’s 2026 Qui Tam Conference and covered by several media outlets, Brenna Jenny, Deputy Assistant Attorney General Commercial Litigation Branch, suggested the Trump Administration’s efforts should not be viewed as combatting DEI programs per se, but instead as targeting discrimination which may or may not arise out of DEI programs. Jenny noted that not all DEI programs are unlawful and that the  DOJ’s use of the False Claims Act (FCA) in this area focuses on investigating programs by federal contractors and potential grant recipients in which participation is “restricted on the basis of race or sex” such as executive training and mentoring programs.

Background – the 2025 executive order 

On January 21, 2025, President Trump issued an executive order restricting federal agencies, contractors, and grant recipients from promoting “illegal” DEI policies and conditioned government funding on adhering to this restriction. See Executive Order 14173, found here.  

However, the executive order lacked guidance on the factors that would render a DEI program “illegal,” resulting in many companies and universities that regularly work with the U.S. government or receive federal grants either scaling back components of their DEI programs or getting rid of them entirely.

In May 2025, the DOJ launched a new initiative called the Civil Rights Fraud Initiative (CRF Initiative), which reportedly sought to use the FCA to target universities’ and government contractors’ DEI programs. Our prior discussion of this initiative is here. 

The FCA, 31 U.S.C. §§ 3729-3733, one of the government’s most powerful enforcement tools, provides that, “any person who knowingly submits, or causes to submit, false claims to the government” is liable for treble damages plus a penalty that is linked to inflation.¹  FCA liability can also be imposed where one, “knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government.” For further information on the DOJ’s settlements and judgements pursuant to the FCA, see Record-breaking U.S. DOJ year of settlements and judgments under the False Claims Act.

DOJ’s examples of discriminatory programs

While the Trump DOJ has made clear that it would use the FCA to investigate DEI programs, the types of programs that DOJ viewed as “illegal DEI” remained unclear.  During her comments, Jenny, who characterized DOJ’s investigations as focused on discrimination rather than DEI programs, provided significant insight into the types of programs that DOJ viewed as problematic.

“At the top of the list for me and what's coming into focus as the heart of many of our investigations are companies that implemented programs and practices that pressured supervisors and management to make hiring and promotion decisions based on race or sex.”  

Jenny went on to describe several other corporate programs that have often been part of a corporate DEI program or commitment, including creating and tracking demographic goals, tying employee compensation to the achievement of corporate demographic goals, and requiring employees to develop their own DEI goals that affect their compensation and promotion.  Jenny added that “[a] couple other programs we’ve been taking a look at are executive training and mentoring programs, where participation is restricted on the basis of race or sex and diverse slate policies.” Jenny noted that these programs can offer special access to company leadership and mentorship that are reserved for employees of a certain race or gender. 

Comment

Despite the examples provided through Jenny’s recent comments, much remains unclear about DOJ’s effort to investigate these so-called illegal DEI programs including the number of investigations being initiated, how FCA damages might be calculated in these cases, and, perhaps most importantly, whether the federal courts will ultimately agree that these programs constitute FCA violations. Nonetheless, the February 19, 2026 panel discussion suggests the DOJ is indeed implementing the President’s executive orders and that recipients of federal funds should look closely at how they describe and implement any corporate program that takes into account an individual’s race or gender.

The 2026 A&O Shearman Cross-border White Collar Crime and Investigations Review identifies ‘Evolving ESG-related enforcement risk in 2026’ as one of the key challenges from in-house counsel, including DEI program issues in the U.S. Read the Review for the other key challenges. 

¹ U.S. Department of Justice, The False Claims Act, https://www.justice.gov/civil/false-claims-act.