On April 10, 2026, the United States announced a USD 17 million settlement to resolve allegations that a government contractor’s DEI employment practices violated anti-discrimination requirements. This first resolution under the Department of Justice’s (DOJ) Civil Rights Fraud Initiative demonstrates the federal government’s novel use of the False Claims Act (FCA) to penalize government contractors that implemented Diversity-Equity-Inclusion (DEI) policies previously endorsed by the US Government. The announcement follows Executive Orders (EOs) issued in January 2025 and March 2026 instructing federal agencies to prevent government contractors from basing employment decisions on race, color, religion, sex, or national origin in violation of civil rights laws, regardless of which group is favored, and related guidance from DOJ and the Equal Employment Opportunity Commission (EEOC).

Ethan Primeaux, Associate, has contributed to this legal update.