The White House on March 26 issued an executive order titled Addressing DEI Discrimination by Federal Contractors that continues the US administration’s focus on combating diversity, equity, and inclusion initiatives in the federal contractor space. The executive order is likely to impact all federal contractors and subcontractors, who should continue to partner with experienced counsel to understand and reduce their risks.
Accompanying the executive order (the Order), the White House issued a Fact Sheet summarizing the Order’s purpose and objectives and detailing the administration’s prior actions to “deliver on [the president’s] promise to end DEI across the Federal Government.”
Significantly, the Order prioritizes False Claims Act (FCA) liability for federal contractors who engage in “racially discriminatory DEI activities,” which is broadly defined in the Order and is not tethered to existing federal anti-discrimination laws. The Order’s definition of “racially discriminatory DEI activities” broadens and clarifies the scope of activities the government views as unethical and unlawful. Notably, the Order does not reference sex or gender discrimination.
In establishing a series of new and potentially burdensome compliance obligations for federal contractors, the Order evinces a frustration with enforcement activities undertaken to date pursuant to other anti-DEI executive orders issued in the early days of President Trump’s current term.
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