As 2025 drew to a close, the Wall Street Journal (WSJ) reported on December 28 that the U.S. Department of Justice (DOJ) is continuing to use the False Claims Act (FCA) to scrutinize diversity, equity, and inclusion (DEI) initiatives at major U.S. companies that do business with the federal government.

What You Need to Know:

• FCA Investigations Are Scrutinizing DEI Programs. DOJ is poised to aggressively use the FCA to investigate and pursue claims against private employers that contract with the government or seek government funding for allegedly maintaining “illegal” workplace DEI programs.
• Focus on DEI Program Implementation. DOJ is examining not just the policies but also how DEI programs are implemented and how they allocate benefits or burdens.

Continued Risks for Companies with DEI Programs

According to the WSJ article, DOJ is investigating well-known employers—including in the technology and telecommunications sectors—and demanding documents and information about workplace diversity programs tied to hiring and promotion decisions. The reported use of civil investigative demands (CIDs) in this context underscores that DOJ is treating these matters as potential fraud investigations, not merely policy disputes. Accordingly, companies with DEI initiatives, and particularly those that are government contractors, grantees, or other recipients of federal funds, should proceed carefully and deliberately.

The FCA and DEI Programs

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