Trump signs EO 14398 exposing federal contractors' DEI programs to False Claims Act liability
On March 26, 2026, President Trump signed Executive Order 14398, "Addressing DEI Discrimination by Federal Contractors," directing agencies to insert a mandatory clause — flowing down to subcontractors at every tier — that bars "racially discriminatory" diversity, equity, and inclusion practices and makes compliance material to government payment decisions, exposing contractors to False Claims Act liability and to cancellation, suspension, or debarment. The order directs the Attorney General to prioritize False Claims Act enforcement against violators and defines covered "program participation" expansively to include training, mentoring, leadership-development programs, clubs, and associations. A legal challenge was filed within days, and the new clause was set to take effect April 24, 2026.
