DOJ outlines framework for FCA enforcement relating to DEI programs and other priorities

At the Federal Bar Association’s Annual Qui Tam Conference on February 19, 2026, Department of Justice (DOJ) representative Brenna Jenny (Deputy Assistant Attorney General for Commercial Litigation) discussed perspectives and enforcement priorities for the False Claims Act (FCA), including certain diversity, equity, and inclusion (DEI) practices, health care, and trade.

We briefed on January 28 and February 6 that DOJ had a record-breaking past year of FCA enforcement. Jenny announced that DOJ has already received 480 new qui tams this year and noted the government now regularly issues over 1,000 CIDs every year.

Given the government’s limited resources, however, the perspectives and priorities that Jenny shared are likely to shape how it investigates and evaluates that influx of new cases.

DEI enforcement framework

In what are believed to be DOJ’s first substantive remarks focused on how the government could use the FCA to enforce what has been described as “illegal DEI” in Executive Order 14173 and explained in DOJ’s July 2025 guidance, Jenny walked through how certain practices could satisfy each element of an FCA violation.

• Falsity: Jenny made clear that DOJ is not investigating companies for having a DEI program. Rather, it is investigating government contractors for potential violations of anti-discrimination laws. Jenny highlighted the types of practices that DOJ finds problematic, including preferences for hiring or promotion based on protected traits, and mentioned a particular concern when meeting these preferences impacts compensation or performance evaluation of supervisors or recruiting personnel, as well as diverse slate requirements.
• Materiality: Jenny seemed to respond directly to recent speculation that DOJ might face challenges in establishing materiality in these types of cases. She noted that an absence of prior enforcement does not mean compliance is not material to the government’s decision to contract with an organization, and pointed to the evolution of FCA enforcement across a variety of topic areas, including kickbacks, cybersecurity, and tariffs and customs. Providing additional color on DOJ’s position, Jenny noted that the purpose of government contracting is not only the provision of particular goods or services but also the forging of a partnership with the United States, and contractors are expected to comply with all applicable laws and regulations.
• Scienter: Jenny also commented on the government’s ability to prove scienter in these types of cases, noting that, as with any FCA case, scienter could be proved through direct evidence, as well as indirect evidence, including where outward-facing statements do not match internal communications. For example, where a policy or training document states that a company does not discriminate based on protected traits, but where emails or other documents suggest that the company considers race, heritage, or gender in its hiring or promotion practices.
• Damages: Jenny again seemed to respond to recent commentary that the government would be unable to establish any damages based on the existence of a DEI program, noting that, as with any FCA case, the government’s assessment of damages would vary based on extent and scope. She suggested that in some cases, the government may take issue with the entirety of a contract on the grounds that the United States would not have contracted with the company at all had it known about its allegedly discriminatory practices. In other cases, the government might seek only partial compensation, such as the amount of any such program that was passed on to it. Jenny emphasized that penalties may also be considered as a way to deter future discriminatory conduct.

DOJ enforcement perspectives

In delivering keynote remarks, Jenny provided her views on some critical aspects of FCA enforcement.

First, Jenny stated that the government’s highest enforcement priority is conduct that is dangerous or defective and jeopardizes health and safety, commenting that putting people in harm’s way is problematic even if no actual harm occurs.

Second, Jenny emphasized – consistent with past guidance – that DOJ will not use subregulatory guidance as a basis for an FCA claim, as opposed to grounding enforcement in statutes or regulations.

Third, Jenny reiterated prior comments that DOJ is committed to using its (c)(2)(A) dismissal authority sparingly, but not reluctantly. The Department exercised this authority a record 25 times last year. Jenny has instructed DOJ attorneys to analyze a case for dismissal in connection with declination decisions, as opposed to on an ad hoc basis.

Next, Jenny highlighted DOJ’s data-mining capabilities, noting that CID recipients should assume that the government has reviewed their data (e.g. for trends or outliers). Nevertheless, Jenny commented that data analysis will not replace the role of relators in reducing information asymmetry between the government and potential fraudsters.

Finally, Jenny remarked on DOJ’s current enforcement priorities:

• Health care: As to the primary industry impacted by FCA enforcement, Jenny said that DOJ’s top three health care enforcement priorities include: (1) managed care, with a particular emphasis on risk adjustment practices; (2) drug pricing, with a focus on purported fraudulent conduct such as inaccurate or misleading drug price reporting or the use of copay assistance or other financial support to arguably insulate price increases or steer usage; and (3) alleged unnecessary services and substandard care.
• Trade: Jenny highlighted the Administration’s dedicated Trade Fraud Task Force and noted these cases reached a record high last year. Key priorities in the trade space include misclassification, undervaluation, and country-of-origin claims.

Ultimately, Jenny made clear that DOJ will explore new areas of enforcement, noting that the novelty of an enforcement priority does not mean it is unfounded. She also outlined key considerations that may influence how the government evaluates, acts on, or potentially dismisses pending cases.

If you have any questions about this client alert or need assistance with FCA matters, please reach out to our team members.

Client Alert 2026-038