Compliance Stuff

On June 10, 2026, nineteen states and the District of Columbia filed suit in the District of Maryland seeking to halt implementation of Executive Order 14398, which was issued on March 26, 2026. The order requires federal agencies to insert a mandatory contract clause into all contracts, subcontracts, and “contract-like instruments” prohibiting contractors from engaging in “racially discriminatory DEI activities.” Compliance with the new clause is an express condition of eligibility to contract with the federal government, and consequences for noncompliance specifically include contract cancellation, exclusion from future federal contracts, suspension, and False Claims Act (FCA) liability . Filed as Maryland v. Hegseth , the complaint comes just two months after the administration announced its first False Claims Act resolution under the Civil Rights Fraud Initiative, a $17 million settlement with IBM. The IBM Settlement In April, IBM agreed to pay $17,077,043 to resolve allegations t...

On April 30, 2026, the U.S. Department of Justice (“DOJ”) announced two significant developments that materially expand the federal government’s fraud enforcement footprint and reshape the landscape for potential targets and whistleblowers.  First, DOJ’s newly created National Fraud Enforcement Division (the “NFED”) (see our alert   here )  launched  the West Coast Health Care Fraud Strike Force (the “Strike Force”), a multi-district initiative covering Arizona, Nevada, and the Northern District of California.    Second, DOJ’s Civil Division  announced  the Fraud Oversight through Careful Use of Statistics (“FOCUS”)  initiative , which formalizes DOJ’s engagement with data miners filing qui tam complaints under the False Claims Act (“FCA”).    These actions signal an aggressive, data-driven, and resource-intensive approach to combating fraud against federal programs that entities and individuals should be prepared to navigate. NFED:...

Executive Order (EO) No. 14398, “ Addressing DEI Discrimination by Federal Contractors ,” issued on March 26, 2026, introduces a  new compliance dynamic  for federal contractors by requiring prime contractors to report “known or reasonably knowable” subcontractor conduct that constitutes “racially discriminatory” diversity, equity, and inclusion (DEI) activities. 00:00 10:32 While the new contractual obligation is plainly written, the contours of what is “reasonably knowable” are less certain. For primes, the key question now is how far their due diligence and oversight responsibilities should extend into the operations of their subs, particularly in sensitive internal areas such as employment practices (e.g., hiring and promotions), employee program participation, contracting, or allocation or deployment of company resources. The clause’s focus on conduct “[i]n connection with” the contract and traditional industry practice in the prime–sub relationship can provide a complia...

At a Glance The Policy Week in Review, prepared by Littler’s Workplace Policy Institute (WPI), sets forth WPI’s updates on federal legislation, regulations, and congressional activity affecting the workplace. Senate Passes Partial DHS Funding Legislation; House Rejects It; DHS Shutdown Continues   After a shutdown lasting over a month (41 days) at the Department of Homeland Security (DHS) and ensuing failed negotiations in the Senate to reach consensus on legislation to fund the Department over demands for reforms to immigration enforcement, the Senate finally voted early this morning to pass a bill to partially fund the DHS. The deal funds most of DHS except for Immigration and Customs Enforcement and Customs and Border Patrol. The legislation shifted over to the House for consideration where it was rejected this afternoon by House conservatives who want full-year ICE and CBP funding, plus voter-ID requirements added to the bill. Moments later, amid mounting TSA pressures and long...

On March 26, 2026, President Donald Trump signed an executive order (EO) titled “ Addressing DEI Discrimination by Federal Contractors ” that, for the first time, attaches direct contractual consequences to diversity, equity, and inclusion (DEI) practices in federal contracting. 00:00 10:59 Quick Hits On March 26, 2026, President Trump issued an executive order (EO) with broad applicability to federal contractors and subcontractors, but certain agreements would not likely be covered by the EO, including Other Transaction Agreements (OTAs), cooperative agreements, and grants. The EO defines “racially discriminatory DEI activities” as disparate treatment based on race or ethnicity across hiring , promotions, vendor agreements, training, and program participation—a notable departure from earlier EOs that used the phrase “unlawful DEI” without defining it. Enforcement authority appears to rest with individual contracting agencies, which may terminate or suspend contracts and initiate deba...