Compliance Stuff

The Diversity, Equity, and Inclusion (DEI) legal landscape continues to shift and present new risks as DEI continues to be a focus for the federal government and ideologically aligned state Attorneys General. Most recently, late-March 2026 produced three fast-moving developments that signal continued—and in some areas intensified—scrutiny of DEI-adjacent initiatives for employers, federal contractors, and higher education institutions.  Specifically, the White House issued a new executive order aimed at federal contracts, the Department of Justice is now investigating the admissions practices of several medical schools, the Florida Attorney General has taken aim at a long-standing DEI-related rule used by the National Football League, and the EEOC is warning employers to that DEI policies may create race and sex-based discrimination in employment. Employers and other entities should be aware that these actions make clear that there is sustained interest in targeting DEI practices. ...

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 ...

In July, the DOJ released updated guidance on what might constitute “illegal DEI” by government contractors under an executive order issued in January. As a result, contractors must now move beyond compliance checklists and toward a strategic, principled and legally sound approach to workforce management, says Constangy partner Cara Crotty, who breaks down the latest developments.   In January, President Donald Trump signed Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This action rescinded Executive Order 11246, signed in 1965 to provide equal opportunity for women and minorities in hiring by government contractors. The practical implications of this significant shift are just beginning to unfold. Contractors must now recalibrate their  compliance  practices, understand their remaining legal obligations and prepare for a new era of federal scrutiny, one that targets DEI programs as potential sources of unlawful discriminati...