Current Situation

Department of Justice (DOJ) Civil Rights Fraud Initiative - On May 19, 2025 the DOJ issued a Memorandum announcing the establishment of the Civil Rights Fraud Initiative. This initiative establishes an enforcement framework to investigate and bring False Claims Act cases against federal contractors and grant recipients who certify compliance with nondiscrimination laws while allegedly engaging in unlawful practices, particularly in relation to DEI programs. Specifically the memorandum states that:

• Violations can result in substantial penalties, including treble damages and additional fines.
• Individuals are encouraged to report non-compliance, with the False Claims Act qui tam provisions allowing whistleblowers to file lawsuits on behalf of the government. Whistleblowers can also potentially share in any financial recoveries, if the qui tam action is successful.
• While the initial focus of this memorandum is on higher education institutions, it applies to all recipients of federal funds, including construction contractors.  
• The DOJ's Civil Fraud Section and the Civil Rights Division will co-lead enforcement, with support from the Criminal Division, as well as with other federal agencies that enforce civil rights requirements for federal funding recipients, including the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Department of Labor. The Civil Fraud Section and the Civil Rights Division will also establish partnerships with support from all 93 U.S. Attorney's Offices.

Equal Employment Opportunity Commission (EEOC) Guidance - In March, the EEOC issued new technical assistance documents specifically on what constitutes “unlawful discrimination” related to DEI in the workplace. While the guidance notes the type of conduct that has long been prohibited by existing federal law, it also provides a roadmap for employers to ensure their programs don’t run afoul of the Trump Executive Orders. Here are the key takeaways you should note from the guidance:

• Title VII Compliance. The guidance reminds employers that Title VII prohibits employment actions based on race, sex, or other protected characteristics, no matter which employees or applicants are harmed.
• No ‘reverse’ discrimination. “The EEOC’s position is that there is no such thing as ‘reverse’ discrimination,” according to the guidance, and emphasized that there is "no higher showing of proof for so-called 'reverse discrimination.'" This issue is also before the Supreme Court this term. You can read more about the case here.
• No “business necessity” exception for DEI programs. Title VII allows for a bona fide occupational qualification (BFOQ) in very limited circumstances to excuse hiring or classifying an individual based on religion, sex, or national origin – but this exception excludes race and color. The EEOC’s new guidance highlights that Title VII does not provide any “diversity interest” exception to these rules.
• Covered workers. The EEOC added that Title VII protects employees, potential and actual applicants, interns, and training program participants. 

Lawsuits Challenging the Trump Executive Orders. A federal judge in Maryland temporarily blocked parts of two Trump DEI Executive orders, Executive Order 14151 and Executive Order 14173, in February. However, an appeals court lifted the ban on March 14, giving the administration the green light to proceed with its direction while the lawsuit plays out. The appeals court said Pres. Trump’s orders “do not purport to establish the illegality of all efforts to advance diversity, equity or inclusion, and they should not be so understood.” Two of the three ruling judges noted, however, that the administration’s future enforcement of the order could raise constitutional concerns.