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A Justice Department bounty program that incentivizes employees to inform on their employers could lead to more whistleblowing as the Trump administration intensifies its crackdown on diversity, equity, and inclusion initiatives.
The Trump administration is investigating major companies under the False Claims Act, a federal law the Justice Department uses to take action against contractors alleged to have defrauded the government and recoup substantial damages.
Last year, the Justice Department established a task force to investigate federal contractors for alleged violations of the False Claims Act. It said this week it has seen a "rapid increase" in whistleblower complaints filed in recent years.
Getting "ordinary people with access and knowledge to quasi-investigate and flag policies and practices for the government" is central to the Justice Department’s strategy, Elizabeth Bieber, Austin Evers, and Jennifer Loeb, lawyers with the Freshfields law firm, wrote in the Harvard Law School Forum on Corporate Governance in July 2025.
Turning workforce data into early warnings for high-cost employees
"We’re already seeing the wheels in motion. DOJ is trawling actively for complainants and whistleblowers," they said.
Deputy Assistant Attorney General Brenna Jenny’s office is prioritizing anti-discrimination cases across a broad range of industries. Some of those probes were brought to the DOJ’s attention by whistleblowers, Jenny said in February at a Federal Bar Association event.
At the same time, the environment is being shaped by actors outside of formal enforcement channels.
Grassroots activism has also seen a surge in insiders leaking details about corporate DEI programs. Conservative activist Robby Starbuck has routinely spoken about his network of tipsters who helped him mount pressure campaigns that named and shamed corporations into canceling their programs.
Sometimes those whistleblowers use covert tactics, including hidden cameras. The America First Legal advocacy organization, which peppered corporate America with discrimination complaints, has used that footage in complaints.
Financial incentives drive employee action
Financial incentives are also fuelling the rise in whistleblower activity.
"I suspect we’ll see more whistleblower actions given that the DOJ is strongly encouraging them," said David Glasgow, Executive Director of the Meltzer Center for Diversity, Inclusion and Belonging at the NYU School of Law.
What’s in it for employees? They can pocket 15% to 25% of the proceeds, Glasgow said.
"Knowing that any employee in their business could take it upon themselves to sue means that organizational leaders have an incentive to be cautious," he said.
Corporations have become more cautious since Trump took office on campaign promises to restore fairness in the workplace by eradicating "woke" DEI policies he claims harm mostly men and White Americans.
One of his first executive orders required federal contractors to certify that they do not operate “any programs promoting DEI that violate any applicable Federal anti-discrimination laws."
Fearing lawsuits and the loss of government contracts, dozens of the nation's largest companies, from McDonald's to Facebook owner, Meta, rolled back diversity programs.
Pressure to align with Trump’s agenda has only increased in recent months. In March, he signed another executive order requiring federal agencies to prohibit discriminatory DEI practices. Under that directive, the DOJ has been tasked with expediting a review of these cases.
The stakes got higher in April when IBM agreed to pay $17million to resolve claims that its DEI programs violated the False Claims Act. It marked the first settlement since the Justice Department formed a "Civil Rights Fraud Initiative" to crack down on DEI using anti-fraud law.
According to Phelps Dunbar lawyers A. Brian Albritton and Raquel Ramirez Jefferson: “Disputes over how such programs operate in practice create fertile ground for whistleblower allegations that compliance was misrepresented. The order effectively converts internal DEI disagreements into potential FCA fact patterns, particularly where contractors have certified compliance as a condition of payment.”
