Understanding the False Claims Act Implications of Trump’s Latest DEI Order for Federal Contractors

I recently shared my perspective on President Trump’s newest executive order, which is designed to restrict federal contractors from participating in what the administration characterizes as “racially discriminatory” DEI efforts. Under this order, certain DEI‑related activities could put a contractor’s eligibility for future federal work at risk.

In discussing the order, I noted that it may create additional exposure under the False Claims Act. At the same time, I emphasized that the government still faces real obstacles in proving elements like legal falsity, materiality and causation—particularly materiality, given how the Supreme Court framed that standard in its 2016 Escobar decision.

I also pointed out that it remains uncertain whether DEI initiatives truly touch the “core of the bargain” in federal contracting, which is a key question in determining how these cases might unfold.

For a deeper look at the implications of this executive order, I encourage you to read the full Law360 article, “Trump Issues New DEI Order Aimed At Contractors,” published March 27.