THE EXECUTIVE ORDERS ON DEI AND POTENTIAL LIABILITY UNDER THE FALSE CLAIMS ACT
As part of the Presidential Executive Order entitled “Ending Illegal Discrimination and Restoring Merit Based Opportunity,” federal agencies must advise every potential federal contractor and grant recipient that a material part of receiving federal money is a certification that the employer is compliant with anti-discrimination laws. The certification must include a statement that the employer does not operate any program promoting Diversity Equity and Inclusion (DEI) in a manner that violates anti-discrimination laws. Neither the Executive Orders nor any laws, rules, or regulations define when a DEI program violates the law.
While the Executive Order creates ambiguity as to exactly when a DEI program is unlawful, employers should be mindful that making a false certification when requesting payment of federal funds exposes the employer to liability under the False Claims Act (FCA). The FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s damages plus a penalty linked to inflation. The Department of Justice enforces the FCA, which permits both the Department of Justice and private citizens to file suits on behalf of the government against those who have defrauded the government.
In short, employers that wish to be awarded federal contracts or grants must carefully review any DEI programs that they maintain before signing this certification.
