Each week, Liebert Cassidy Whitmore provides a summary of newly issued Executive Orders and other significant Presidential and federal actions that have a foreseeable impact on governance, compliance, and operational policies for California employers. The summaries below outline the key provisions of each action, along with our brief analysis of their potential implications for municipal agencies, school districts, private schools, and nonprofits.
Executive Action: Department of Justice Announces Civil Rights Fraud Initiative (May 19, 2025)
On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum announcing the establishment of the Civil Rights Fraud Initiative within the Department of Justice. The Initiative will utilize the federal False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.
The False Claims Act, 31 U.S.C. Section 3729 et. seq., generally makes it unlawful to knowingly submit a false or fraudulent claim for payment to the federal government or use a false statement to get a claim paid. The Trump administration’s position is that the False Claims Act 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.”
By way of example, the memo states that “a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.”
The Initiative builds on President Trump’s Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which required all federal contracts and grant awards to incorporate a term certifying that the contractor or grantee does not operate any DEI programs that would violate applicable federal anti-discrimination laws.
The memo states that the Department of Justice will form partnerships with local law enforcement for information sharing and enforcement. Notably, the memo emphasizes that the False Claims Act includes a private right of action and encourages private individuals to both file lawsuits and to report discriminatory practices by federal funding recipients to the appropriate federal authorities.
The Initiative may lead to an increase in enforcement actions against recipients of federal funding that operate allegedly unlawful DEI-related programs. LCW encourages entities that receive federal funding to carefully evaluate their policies and practices in light of the administration’s position regarding federal anti-discrimination law.
Update: Judge Blocks Trump Administration from Closing the Department of Education (May 22, 2025)
On Thursday, a federal judge in Massachusetts issued a preliminary injunction blocking President Trump and Secretary of Education Linda McMahon from carrying out the March 20, 2025 executive order calling for the secretary to close the Department of Education. The injunction states that the administration cannot shut down the Department without Congress’s approval.
The judge also directed the administration to reinstate the roughly 1,300 Department of Education employees who were told in March that they would lose their jobs as part of a reduction-in-force (RIF). The judge noted that the administration did not show that the RIF accomplished their stated goal of making the Department more efficient. To the contrary, the evidence in the record showed that the RIF impeded the Department’s ability to carry out its statutory functions.
The Trump administration plans to appeal the injunction. LCW will continue to monitor developments.