The Trump administration's use of the False Claims Act to go after DEI policies diverges from past administrations' use of the civil fraud statute to tackle policy initiatives in key ways that may pose legal challenges to enforcement.
[...]
The Trump administration's recent $17 million settlement with IBM last month to resolve claims the company violated the FCA with policies aimed at increasing workforce diversity highlights these key legal hurdles the government would likely encounter bringing such a case in court.
The government didn't allege that IBM was aware that its DEI policies violated federal antidiscrimination laws in 2019, when the conduct allegedly began. It also made no claim that IBM did not deliver on the products and services it was contracted to provide, making it "very difficult to tell how that $17 million was derived," said Jennifer A. Short, a partner with Blank Rome LLP's white collar defense and investigations practice group.
While some businesses that are more dependent on government contract work might try to reach a favorable settlement with the DOJ that mirrors the IBM deal, others might take a different approach, noting these potential shortcomings in the DOJ's case, according to Dominique L. Casimir, co-chair of Blank Rome LLP's general litigation practice group.
"They may rationally choose to go a different path, particularly given that the Department of Justice is expected to face some difficulties establishing the various elements of the False Claims Act in litigation," Casimir said.
To read the full article, please click here.
"Using FCA To Go After DEI Poses Legal Hurdles For DOJ," by Madeline Lyskawa was published in Law360 on May 8, 2026.