Bacterial colonies often exhibit complex spatio-temporal organization. This collective behavior is affected by a multitude of factors ranging from the properties of individual cells (shape, motility, membrane structure) to chemotaxis and other means of cell-cell communication. One of the important but often overlooked mechanisms of spatio-temporal organization is direct mechanical contact among cells in dense colonies such as biofilms. While in natural habitats all these different mechanisms and factors act in concert, one can use laboratory cell cultures to study certain mechanisms in isolation. Recent work demonstrated that growth and ensuing expansion flow of rod-like bacteria Escherichia coli in confined environments leads to orientation of cells along the flow direction and thus to ordering of cells. However, the cell orientational ordering remained imperfect. In this paper we study one mechanism responsible for the persistence of disorder in growing cell populations. We demonstrate experimentally that a growing colony of nematically ordered cells is prone to the buckling instability. Our theoretical analysis and discrete-element simulations suggest that the nature of this instability is related to the anisotropy of the stress tensor in the ordered cell colony.