Summary
On May 19, the Department of Justice (DOJ) announced via a memo titled "Civil Rights Fraud Initiative" (the Memo) an initiative to use the False Claims Act (FCA) against federal contractors and recipients of federal funds that "knowingly violate[] civil rights laws... and falsely certif[y] compliance with such laws." The Memo cites "a university... encourag[ing] antisemitism, refus[ing] to protect Jewish students, allow[ing] men to intrude into women's bathrooms, or requir[ing] women to compete against men in athletic competitions" as examples of when a university "could [be] violat[ing] the False Claims Act." The Memo also states that the FCA is implicated "whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin."
The Upshot
- DOJ is creating a "Civil Rights Fraud Initiative" to pursue FCA cases against colleges and universities that allegedly violate civil rights law by not properly preventing and responding to antisemitism on their campuses.
- The new initiative is also focused on bringing FCA claims against colleges and universities that permit transgender women to use women's bathrooms and to compete on women's sports teams.
- While the Memo specifically identifies higher education as a possible target, the initiative includes all federal contractors and funding recipients alleged to have falsely reported compliance with civil rights laws.
- The Memo "strongly encourages" individuals to bring FCA claims against recipients of federal funding and federal contractors and notes that the FCA allows for plaintiffs in such lawsuits to "shar[e] in any monetary recovery."
The Bottom Line
Federal contractors and recipients of federal funding—particularly colleges and universities—should evaluate their processes and policies to ensure compliance with civil rights laws in light of the Trump administration's enforcement priorities, and carefully review language related to civil rights laws compliance in annual or regular certifications required to participate in federal programs.
On May 19, the DOJ announced via a memo titled "Civil Rights Fraud Initiative" (the Memo) an initiative to use the False Claims Act (FCA) against federal contractors and recipients of federal funds that "knowingly violate[] civil rights laws... and falsely certif[y] compliance with such laws." Liability under the FCA results in treble damages and significant penalties. The Memo cites "a university... encourag[ing] antisemitism, refus[ing] to protect Jewish students, allow[ing] men to intrude into women's bathrooms, or requir[ing] women to compete against men in athletic competitions" as examples of when a university "could [be] violat[ing] the False Claims Act." The Memo follows President Trump's January 21, 2025, Executive Order "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" that, among other things, required that every federal agency include "in every contract or grant award... [a] term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws." The Memo coincides with the executive order's direction to the Attorney General, in consultation with other relevant agencies and the Office of Management and Budget, to "submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI."
The Memo also states that the FCA is implicated "whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin." In so doing, the Memo cites to the Supreme Court decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions, Inc. v. University of North Carolina (collectively SFFA). While SFFA only prohibits the consideration of race in admissions, some have argued its reasoning applies to other civil rights laws, such as Title VII, and thus effectively bars the consideration of race in employment and contracting decisions.
The Memo ends by "strongly encourag[ing]" individuals to bring FCA claims against recipients of federal funding and federal contractors and notes that the FCA allows for plaintiffs in such lawsuits to "shar[e] in any monetary recovery."
Federal contractors and recipients of federal funding—particularly colleges and universities—should evaluate their processes and policies to ensure compliance with civil rights laws in light of the Trump administration's enforcement priorities, and carefully review language related to civil rights laws compliance in annual or regular certifications required to participate in federal programs.
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