Since our April 6 blog, Why the New DEI Executive Order Matters for Federal Contractors—and Signals Broader Risk for All US Employers, where we highlighted how the latest Executive Order creates new contractual obligations for federal contractors and subcontractors, with potentially far reaching implications, there have been several significant developments that collectively signal a meaningful escalation in scrutiny and enforcement risk for employers.

• DOJ’s first DEI-based False Claims Act resolution: On April 10, DOJ announced its first False Claims Act settlement premised on alleged DEI related misrepresentations by a large multinational employer. Although the company denied the allegations, it agreed to pay $17 million to resolve claims that it improperly considered protected characteristics in employment decisions, including through compensation incentives, interview practices, and access to certain programs. This first resolution under DOJ’s newly created Civil Rights Fraud Initiative demonstrates the federal government’s novel use of the FCA to penalize government contractors that it alleges fail to comply with required certification requirements and knowingly maintain discriminatory employment practices, and is likely an indicator of further inquiries, investigations, and lawsuits to come. Please see our colleagues’ client alert, FCA Settlement Highlights Federal Contractor DEI Risks, here.
• Potential EEOC enforcement focus on employee race and sex data: Recent...

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