Trump administration opens DEI investigations
By: Jessica Guyan
USA Today
..... The Trump administration is investigating diversity initiatives at major companies under the False Claims act, a federal law the Department of Justice uses to take action against contractors that defraud the government.
..... As USA Today reported in October, the DOJ in 2025 began issuing civil investigation demands to employers across a broad range of industries, directing then to turn over information about their diversity, equity and inclusion programs.
..... The use of CIDs - a tool that allows the government to gather information during a civil investigation and that is usually reserved to pursue government contractors that submit fraudulent bills for there services - has rattled corporate America, because it leaves companies vulnerable to claims that could reach into the millions of dollars.
..... Among the companies that has received DOJ investigative demands are Alphabet's Google and Verizon Communications, the Wall Street Journal reported. Google could not be immediately reached for comment. Verizon declined to comment.
..... Just hours after he too the oath of office on January 20, 2025, President Donald Trump issued executive orders to dismantle diversity programs and directed federal concentrators to end "illegal DEI discrimination." Fearing lawsuits and the loss of government contracts, dozens of the nation's largest companies from McDonald's to Facebook owner Meta, rolled back or eliminated DEI programs.
..... In May, [2025] the DOJ signaled its intention to investigate federal contractors and grant recipients by creating a "Civil Right Fraud Initiative," which threatens legal action under the False Claims Act, a civil law that allows the government to recover funds lost to fraud.
..... Government scrutiny has only intensified as the Trump administration moves aggressively to pressure employers into overhauling hiring practices to align with the president's political agenda.
..... Damages and penalties can quickly add up in False Claims Act lawsuits, lawyers told USA Today. Defendants are at risk of being held liable for three times the damages the government alleges.
..... What's more, the DOJ is encouraging whisteblowers to file DEI lawsuits on the government's behalf and potentially receive a portion of the windfall. Last year, [2024[ the DOJ took in nearly $3 billion in False Claims Act settlements and judgments.
..... Just the threat of a False Claims Act investigation is a powerful cudgel, lawyers say. And becoming a target of the administration carries significant business risks, from reputation damages to shareholder class-action lawsuits.
..... I've had many leader say to me, 'we are very confident from a purely legal perspective in what we are doing,'" David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at the NYU School pf Law, told USA Today in October. [2025] "And then a lot of them will say to me, 'none of that really matters if we have been dragged through the mud by this administration.'"