In our prior Baker Donelson Client Alert, we examined the labor and employment implications of Attorney General Pam Bondi's Ending Illegal DEI and DEIA Discrimination & Preferences memorandum. This alert focuses on the government enforcement and investigation risks stemming from that memorandum, including the increased scrutiny of corporate DEI programs and the potential for civil and criminal liability.
On February 5, 2025, the Department of Justice issued a directive instructing the Civil Rights Division and the Office of Legal Policy to identify enforcement actions against organizations with DEI programs that may be deemed unlawful under federal anti-discrimination laws. These enforcement actions include civil compliance investigations, regulatory actions, and, in some cases, potential criminal investigations. This directive builds on Executive Order 14173, issued on January 21, 2025, which calls for federal agencies to scrutinize the DEI practices of publicly traded corporations, large non-profits, foundations, professional associations, and universities with significant endowments. The administration has signaled that it intends to use every available enforcement mechanism to curb what it has characterized as unlawful preferences embedded within DEI programs.
Executive Summary
- The False Claims Act (FCA) will be a primary enforcement tool against federal contractors and grant recipients who fail to certify compliance with the new DEI restrictions. While the FCA...
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