Bass, Berry & Sims attorney Audrey Anderson recently participated in a panel discussion at the Federal Bar Association’s 2026 Qui Tam Conference focused on “‘Illegal DEI’ as an FCA Trigger.” The panelists explored the scope of False Claims Act (FCA) enforcement under the Department of Justice’s (DOJ) Civil Rights Fraud Initiative and recent executive actions addressing “illegal DEI [diversity, equity and inclusion].” In addition to Audrey and other law firm attorneys, the panel included a speaker from the DOJ.
Articles in Law360 and Bloomberg Law recapped the panel’s insights. In discussing the lack of clarity in the January 2025 executive order that defined “illegal” DEI and how companies responded to the ambiguity, Audrey said “Without more guidance on what the government thought was legal and illegal, there was lots of overcorrection. People who really wanted to be risk-averse and stay off the bad list tried to make absolutely sure that they excised anything about diversity, equity and inclusion.”
In July 2025, U.S. Attorney General Pam Bondi provided guidance on best practices on how federally funded recipients could comply with the antidiscrimination law. “In some ways, these best practices are statements that any civil rights lawyer would agree with. For example, you can’t use race in making decisions to hire or fire. But in other ways, the best practices go beyond what a lot of civil rights lawyers would say is the current law,” Audrey said, adding that failing to follow Bondi’s guidance could make contractors and grant recipients a target for FCA enforcement activities.
However, some of the best practices are also antithetical to what the DOJ is saying in other areas, Audrey added, highlighting part of the July guidance that says if a university is going to use a racially neutral factor that may have a disparate impact, the university should make sure that practice won’t have such an impact.
The two articles published on February 19 and are available online: