On May 19, 2025, the U.S. Department of Justice (“DOJ”) released a memorandum announcing the establishment of a Civil Rights Fraud Initiative that will “vigorous[ly]” enforce the False Claims Act (“FCA”) against federal fund recipients that knowingly violate the civil rights laws by allowing antisemitism or promoting “divisive DEI policies.” The memorandum also strongly encourages whistleblowers to file claims under the FCA against federal contractors that are believed to have engaged in civil rights violations, or to report that information to federal authorities.
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As we previously discussed, one of President Trump’s first Executive Orders on January 21, 2025 included a requirement that federal contracts include terms (i) “requiring the contractual counterparty . . . to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions”; and (ii) “requiring such counterparty . . . to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
On May 19, 2025, a DOJ memorandum announced the creation of a “Civil Rights Fraud Initiative,” under the umbrella of the Civil Division’s Fraud Section. The Initiative will “investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws” in cooperation with the Criminal Division, other state and federal agencies, and attorneys from each of the 93 United States Attorneys’ Offices.
The memorandum explains that the FCA will be “implicated when a federal contractor or recipient of federal funds knowingly violates civil rights laws—including but not limited to Title IV, Title VI, and Title IX, of the Civil Rights Act of 1964—and falsely certifies compliance with such laws.” The memorandum states that such violations are implicated where an institution “knowingly engag[es] in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin,” including where “corporations and schools continue to adhere to racist policies and preferences—albeit camouflaged with cosmetic changes that disguise their discriminatory nature.” The memorandum further states that “a university that accepts federal funds could violate the FCA when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.”
The memorandum also “strongly encourages” private civil actions to enforce the FCA in this area. Liability under the FCA can include civil monetary penalties of up to $27,894 plus triple the amount of any damages sustained by the government. The memorandum also encourages individuals with knowledge of information of civil rights violations to report that information to the appropriate federal authorities so that the DOJ may take appropriate action.
Employers should continue to closely monitor the changing political and legal landscape in this area.