Use of False Claims Act Against DEI Programs Challenged in Court

Almost immediately upon taking office, President Donald Trump took a series of actions designed to deter Diversity, Equity and Inclusion (DEI) programs, some of which violate civil rights laws, according to the administration. One key move was outlined in Executive Order 14173, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” 

The text of that executive order references the False Claims Act (FCA), which allows for substantial penalties, including treble damages, for false certifications made in connection with government contracts. Parties that seek to provide goods or services to the government now must affirm that the contractor or grantee does not operate any DEI programs that violate applicable federal anti-discrimination laws. A false representation would run afoul of the FCA. Moreover, the FCA includes a whistleblower provision that enables someone who becomes aware of an FCA violation to file suit on the government’s behalf and collect a portion of any financial recovery obtained by the government. 

In practice, this would mean that employees of government contractors would be incentivized to initiate legal action if they believe their employers are engaging in unlawful bias out of a purported commitment to DEI principles. One of the primary challenges associated with this executive order is its scope. The requirement to certify compliance with anti-discrimination laws in DEI programs leaves room for subjective interpretation. What one person views as a legitimate effort to address systemic inequities could be seen by someone else as illegal bias against certain groups. 

Not surprisingly, Executive Order 14173 and similar DEI-related directives have prompted legal challenges. In a case entitled National Association of Diversity Offices in Higher Education, et al. v. Donald J. Trump, et al., the U.S. District Court for the District of Maryland issued an injunction dated February 21, 2025 temporarily blocking the government from bringing an enforcement action under the FCA, or any other statute, relating to the executive order. 

Plaintiffs in this case argued that the executive order infringes on free speech and the ability of organizations to address diversity and equity issues in the workplace. Furthermore, they allege that the ambiguity regarding what statements or programs constitute illegal promotion of DEI makes it impossible to complete the mandated certification with confidence. As this executive order faces scrutiny in the courts, its future remains uncertain. 

Workers who believe that their government contractor employer broke the law in a supposed effort to foster diversity should consult with an attorney at Kardell Law Group to understand the latest legal developments. We have extensive experience representing employees in FCA whistleblower cases, including qui tam litigation where clients have secured substantial financial awards.