Corporate practices that encourage employment decisions based on race or sex—including demographic tracking—are drawing close attention from the Justice Department as it continues its crackdown on corporate DEI, an official said Thursday.
“At the top of the list for me, and what’s coming into focus as the heart of many of our investigations, are companies that implemented programs and practices that pressured supervisors and management to make hiring and promotion decisions based on race or sex,” said Brenna Jenny, deputy assistant attorney general for the Commercial Litigation Branch of the DOJ’s Civil Division, speaking at a Federal Bar Association conference in Washington.
She highlighted three examples: Setting and tracking corporate goals around workforce demographic data, tying executive compensation to diversity metrics, and asking employees to set diversity, equity and inclusion-related goals that affect compensation and promotion.
DEI cases are receiving expedited priority treatment within her office, said Jenny, who said she was speaking in her personal capacity and not on behalf of the government.
The False Claims Act, which imposes penalties on federal contractors and other recipients of federal funding who make false statements to the government, is one of the most powerful tools the Trump administration is wielding in its DEI crackdown.
Jenny’s comments add a deeper level of detail on DOJ’s investigative priorities under the Trump administration’s use of the federal False Claims Act as a tool to end DEI practices it views as discriminatory.
The DOJ enforcement priority stems from President Donald Trump’s January 2025 executive order instructing federal agencies to “enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
DOJ in May launched the Civil Rights Fraud Initiative, co-led by the Civil Division’s fraud section and the Civil Rights Division. Attorney General Pam Bondi outlined in July some instances when entities may be subject to enforcement action, including DEI hiring and promotion programs prioritizing candidates from “underrepresented groups.”
Pressure on Employee Decisions
“Let me start by making absolutely clear, DOJ Civil Fraud is not investigating companies for having a DEI program,” Jenny said.
But the government has “particularly strong cases where the pressure had its intended effect and resulted in decisions based on race or sex,” she added.
Jenny flagged some corporate goal-setting around demographic metrics, which she said could push decision-making based on protected characteristics.
She pointed to “color-coded charts” companies use to track progress toward demographic goals: “Rather than focusing on qualifications and merit, these charts treated race and sex as performance metrics, signaling that certain demographic outcomes are preferred and others are considered deficient.”
And when companies tie a portion of executive compensation to achieving demographic goals, she said, “the practical pressure is obvious.”
The Trump administration’s DEI crackdown has seen a retreat from companies, including Apple, using DEI and other environment, social and governance metrics to bolster executive compensation.
Jenny said DOJ has also seen companies require employees to develop goals saying they’ll support DEI within the company, and consider progress toward those goals in performance reviews.
DOJ is also looking at executive training and mentoring programs where participation is “restricted on the basis of race or sex,” and diverse slate policies, she said.
The fear of facing an FCA suit over DEI issues has already caused a huge shift in corporate policies, said Audrey Anderson, counsel at Bass, Berry & Sims PLC, speaking on the same panel.
Just the threat of federal litigation has prompted the private sector to adapt policies to avoid being a target of breaking anti-discrimination laws, she added.
“Even if the government doesn’t bring in a single penny in an FCA suit for DEI, this administration has gotten a huge, huge win for promoting its policy agenda by saying that they’re going to bring FCA cases in this area,” Anderson said.
To contact the reporters on this story:
To contact the editor responsible for this story: