On June 11, 2025, Assistant Attorney General Brett Shumate issued a memorandum entitled Civil Division Enforcement Priorities (the “Memorandum”), outlining five areas of focus for Department of Justice (“DOJ”) Civil Division investigations and enforcement actions. Among these priorities is “combatting unlawful discriminatory practices in the private sector.”

Referencing President Donald Trump’s Executive Order 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity), which calls for the elimination of “illegal private-sector DEI preferences, mandates, policies, programs, and activities,” the Memorandum states that “the Civil Division will use all available resources to pursue affirmative litigation combatting unlawful discriminatory practices in the private sector.” This will include “aggressively investigat[ing] and, as appropriate, pursu[ing] False Claims Act violations against recipients of federal funds that knowingly violate civil rights laws.” The Civil Division “will work with the Civil Rights Division, relators, other whistleblowers, and federal agencies” as part of this initiative.

Although the precise contours of what constitutes “illegal” DEI policies remains uncertain, the memorandum is yet another warning to federal contractors and grantees that their diversity, equity and inclusion initiatives are a focal point of federal enforcement efforts. The Memorandum follows the DOJ’s recently established Civil Rights Fraud Initiative, referenced in the Memorandum, which underscores the DOJ’s focus on advancing the objectives of Executive Order 14173 through the FCA and other available enforcement mechanisms.

To the extent they have not yet done so, federal contractors and grantees should carefully review their DEI policies and practices to ensure they comply with federal civil rights laws, taking into account the Administration’s view of what is permissible under those laws. Such analyses should be coordinated with counsel to maximize the ability to assert privilege.