Federal Focus On DEI Initiatives Expands In Corporate Hiring Practices And Regulated Industries

Recent remarks from Trump Administration senior officials signal an expanding federal focus on diversity, equity, and inclusion (DEI) initiatives—particularly where they intersect with corporate hiring, promotion, and compensation decisions.

DOJ Elevates DEI-Related FCA Investigations to "Expedited Priority Treatment"

At the February 19, 2026 annual qui tam conference hosted by the Federal Bar Association, a Department of Justice (DOJ) official emphasized that investigations into DEI-related employment practices are "receiving expedited priority treatment." Brenna Jenny, Deputy Assistant Attorney General for the Commercial Litigation Branch of the Civil Division, described companies implementing practices that pressure decision makers to make employment decisions based on race or sex as "at the top of the list." Her remarks align with the DOJ's broader Civil Rights Fraud Initiative, which leverages the False Claims Act (FCA) to investigate corporate government contractors and grant recipients' DEI practices as "illegal." In other words, the DOJ may treat claims for federal funds as false under the FCA if submitted by a contractor or grantee whose employment practices are found to violate applicable anti-discrimination laws.

While Jenny acknowledged that merely "promoting diversity isn't inherently unlawful," she identified three types of practices that attract attention in DEI investigations:

• Setting and tracking race- or sex-based workforce demographic goals,
• Tying executive compensation to the achievement of workforce demographic goals, and
• Asking employees to set DEI-related goals that affect their performance reviews, compensation, or promotion.

Jenny further described the DOJ's interest in training or mentoring programs that limit participation on the basis of race or sex, as well as "diverse slate" policies that require candidate pools to include certain demographics but that effectively lower qualification standards for those groups.

Despite the absence of precedent for FCA enforcement actions in this context, Jenny noted that FCA enforcement has consistently evolved to address new theories of liability, and that the government's assessment of damages for DEI-related FCA cases would depend on the extent and scope of the violation and may also include penalties to deter future misconduct.

FAA Moves to Require Strictly "Merit-Based" Hiring

Federal scrutiny of DEI initiatives is also expanding in regulated industries. In a notice issued on February 13, 2026, US Transportation Secretary, Sean P. Duffy, has doubled down on "purging DEI from our skies." The Federal Aviation Administration (FAA) proposed an amendment to an existing Operations Specification, OpSpec A134, requiring all commercial airlines to formally commit to strictly merit-based hiring for pilots. While attacking as "absurd" Biden-era initiatives, such as renaming cockpits as flight decks, OpSpec requires all US airlines to certify that they have ended hiring practices based on race or sex. The certification requires that an airline "ensure pilot hiring is exclusively merit-based to fulfill its duty to provide the highest possible degree of safety in the public interest."

Although OpSpec A134 is not yet effective, it is progressing through the FAA's non-emergency amendment process, requiring carriers to submit written comments within seven days and potentially becoming effective 30 days after a disposition letter is issued, if adopted—even though substantive compliance guidance has not yet been provided. The notice explains that OpSpec A134 was developed in response to the January 21, 2025 Executive Order 14173, Ending Illegal Discrimination and Restoring Merit‑Based Opportunity and the Presidential Action titled Keeping Americans Safe in Aviation—both asserting that DEI-based practices in aviation are unlawful, undermine safety, and must be replaced with strictly merit-based hiring.

What This Means for Employers

Together, these developments indicate a coordinated shift in federal enforcement and regulatory policy. Employers—particularly those with formal DEI goals, programs, or tracking—may face increased scrutiny as they have for the last fourteen months since this Administration began. In highly regulated industries like aviation, certification requirements add another compliance layer.

Together, these developments make clear that federal scrutiny of DEI practices is intensifying. Employers, especially those receiving federal funds or holding government contracts, should carefully review any links between hiring, promotion, and compensation practices and DEI initiatives, and consult legal counsel on FCA compliance to mitigate exposure to enforcement actions.

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