Compliance Stuff

On Friday, April 10, 2026, the Department of Justice (“DOJ”) announced a $17 million False Claims Act (“FCA”) settlement with International Business Machines (“IBM”), based on the company’s alleged violations of federal anti-discrimination laws. The settlement is the first under the DOJ’s  Civil Rights Fraud Initiative,  created last May with the objective of investigating and prosecuting “illegal DEI” practices, primarily through an FCA lens. Coupled with a new  Executive Order —issued on March 26—that imposes contract prohibitions on “racially discriminatory DEI activities” in federal government contracts and subcontracts, the IBM settlement signals an escalation in the government’s focus on DEI programs and employment policies. The DOJ Press Release and Settlement Agreement   The Alleged “Covered Conduct” Identifies Specific Problematic Practices.  DOJ alleged that IBM improperly made employment decisions based on protected characteristics t hrough specific ...

Takeaways DOJ attorneys will use the False Claims Act to investigate and pursue claims against any federal funds recipient that knowingly violates federal civil rights laws. The DOJ team will include an attorney from each of the 93 U.S. Attorney’s Offices. All employers and organizations that receive federal funding should review their internal and external DEI-related programs and policies to assess potential risk. Related links Deputy Attorney General Blanche Memo: Civil Rights Fraud Initiative Justice Department Establishes Civil Rights Fraud Initiative  (press release) “ Ending Illegal Discrimination and Restoring Merit-Based Opportunity ” (EO) Trump Administration Revokes EO 11246, Prohibits ‘Illegal’ DEI: What the EO Ending Illegal Discrimination and Restoring Merit-Based Opportunity Means for Employers Article U.S. Deputy Attorney General Todd Blanche issued a  memorandum  introducing the “ Civil Rights Fraud Initiative ” on May 19, 2025. The memorandum directs all...

On May 19, 2025, the U.S. Department of Justice (DOJ) launched its Civil Rights Fraud Initiative. This is a coordinated enforcement effort aimed at using the False Claims Act (FCA) to investigate and, where appropriate, litigate civil rights violations committed by recipients of federal funds. This effort, announced through both a  press release  and a  memorandum  from the deputy attorney general, reflects a significant escalation in the federal government’s posture toward civil rights compliance and underscores expanding legal exposure for employers, contractors, and institutions operating under federal contracts or grants. Quick Hits The DOJ’s new Civil Rights Fraud Initiative treats violations of civil rights laws by federal fund recipients including contractors and grantees as potential fraud under the False Claims Act, exposing employers to treble damages and whistleblower lawsuits. Executive Order (EO) 14173 requires contractors and grantees to certify complia...