DAAG Provides Views on FCA Enforcement Focus: Targeting Discrimination, Not DEI Programs Per Se

By Edwin O. Childs, Brett Barnett, John Adams, Jack White, Brandi G. Howard, Elissa Baur, John S. Moran, Michael J. Podberesky, Jason M. Vespoli, Marua Naehr, Sophie Marsh & John Sullivan on February 26, 2026

At the Federal Bar Association’s 2026 Qui Tam Conference on February 19, 2026, Brenna Jenny, Deputy Assistant Attorney General (DAAG) in the U.S. Department of Justice’s (DOJ) Commercial Litigation Branch, delivered a keynote speech on enforcement priorities under the False Claims Act (FCA) with respect to diversity, equity, and inclusion (DEI) programs. Jenny’s reported remarks provided insight into DOJ’s enforcement priorities and viewpoints on FCA enforcement. A key takeaway from Jenny’s presentation is that, from her perspective, DOJ is not investigating federal contractors and grant recipients for having DEI programs, but rather for potentially engaging in discrimination throught their implementation of those programs. She emphasized that companies can engage in discrimination with or without DEI programs and can also operate DEI programs without engaging in discrimination.

Jenny outlined several specific programs and practices that DOJ has been reviewing for potential violations of federal antidiscrimination laws and, potentially, the FCA:

Programs and practices that pressure supervisors and management to make hiring and promotion decisions based on race or sex;
Creating and tracking demographic goals that have no connection to remedying underutilization within the Office of Federal Contract Compliance Programs framework;
Tying employee compensation to the achievement of corporate demographic goals;
Requiring employees to develop their own DEI goals that affect their compensation and promotion;
Executive training and mentoring programs where participation is restricted on the basis of race or sex; and
Diverse slate policies.

With respect to executive training and mentoring programs, Jenny reportedly stated that, while companies may characterize such programs as no different from those offered to all employees, the programs are often marketed internally as offering special opportunities to network with company leadership and receive mentorship that may lead to promotions. According to Jenny, the nexus between an individual’s participation in such programs and subsequent promotion can raise questions about their legality.

The DAAG’s views are in line with recent executive actions and guidance from the Trump administration. In January 2025, President Trump issued Executive Order 14173 restricting federal agencies, contractors, and grant recipients from engaging in “illegal DEI” activities deemed to violate antidiscrimination laws. Executive Order 14173 revoked Executive Order 11246, which had established the equal opportunity and affirmative action regimes that governed federal contracts for the past six decades. Executive Order 14173 directed federal agency leaders to require contractors and grant recipients to provide a formal certification that the contractor or grant recipient is in compliance with federal antidiscrimination laws, and that such compliance is material to the government’s decision to pay claims under such contract. In May 2025, Deputy Attorney General Todd Blanche announced the creation of the Civil Rights Task Force, which uses the FCA to investigate and pursue claims against recipients of federal funds accused of knowingly violating federal civil rights laws. Attorney General Pam Bondi then issued best practices guidance in July 2025 for recipients of federal funding to comply with applicable antidiscrimination laws.

During a panel discussion at the Qui Tam Conference in which Jenny also participated, one of the panelists reportedly observed that Executive Order 14173 failed to define DEI programs or differentiate “illegal DEI” activities from those that are legal, resulting in a significant overcorrection by companies seeking to avoid enforcement risk. The panel suggested that some of the July 2025 best practices appear to go beyond what many civil rights lawyers would consider current law, and that failing to follow Attorney General Bondi’s guidance could make contractors and grant recipients a target for FCA enforcement.

Another panelist raised potential legal challenges DOJ may face in pursuing these FCA claims based on the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, which limited judicial deference to federal agency interpretations, as well as questions regarding whether any such alleged discrimination is material to the government’s decision to make payment on a claim. Jenny, however, reportedly disagreed with these concerns, arguing that the government is merely pursuing violations of federal antidiscrimination laws, which “clearly places significant guardrails and protections around efforts to diversify a workforce.” Jenny stated that she believes a jury hearing some of the stories emerging from DOJ investigations would “instinctively understand why this type of discrimination is and was material.”

Federal contractors and grant recipients should carefully review their employment practices, compensation structures, and training programs in light of DOJ’s enforcement priorities. Jenny’s perspective on FCA enforcement provides clear context, if not specific direction, regarding likely trends and expectations in investigations initiated by DOJ’s Civil Rights Task Force. Organizations should evaluate whether any programs tie compensation or promotion decisions to demographic goals, restrict participation based on race or sex, or otherwise pressure managers to consider protected characteristics in employment decisions.

For questions about these FCA enforcement developments and the implications for federal contractors and grant recipients, contact the authors or a member of McGuireWoods’ False Claims Act, Government Contracts, Government Investigations & White Collar Litigation, Education, or Employment practice groups.