False Claims Act: Understanding DEI Certification Requirements for Companies

Federal contractors and higher education institutions are navigating unprecedented compliance challenges following Executive Order 14173 and the Department of Justice’s aggressive False Claims Act enforcement strategy, according to legal experts at Foley Hoag LLP.

The executive order, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” implemented new obligations for organizations receiving federal funding. The Justice Department has leveraged these requirements to launch its Civil Rights Fraud Initiative in May 2025, specifically targeting diversity, equity, and inclusion (DEI) programs through False Claims Act enforcement actions.

Reports indicate that several major corporations have already received civil investigative demands (CIDs) requesting extensive documentation about their workplace DEI initiatives. This enforcement approach appears to be gaining momentum, with the DOJ reporting record-breaking recoveries of $6.8 billion in False Claims Act cases during 2025 alone.

The legal landscape surrounding these enforcement actions remains complex and rapidly evolving. While some organizations have successfully challenged DEI certification requirements in court, particularly within higher education contexts, the Fourth Circuit Court of Appeals recently upheld the executive order’s certification mandate, creating uncertainty for organizations attempting to navigate compliance.

Many federal contractors and grant recipients now face difficult decisions about signing new certification provisions, weighing legal risks against access to government funding. The central questions many face are whether these certifications are legally enforceable and how significant the False Claims Act liability threat truly is.

To address these concerns, Foley Hoag’s False Claims Act Defense and Higher Education practice groups are hosting an educational session covering critical developments affecting companies and educational institutions in this new enforcement environment. The one-hour presentation will examine several key areas of concern.

The session will analyze the Justice Department’s Civil Rights Fraud Initiative enforcement approach, including insights from current investigations and civil investigative demands that reveal the government’s legal theories and priorities. Attorneys will also review significant court decisions, including NADOHE v. Trump, the vacatur of Title VI certification requirements, and ongoing constitutional challenges to these enforcement mechanisms.

Additionally, the presentation will address the General Services Administration’s proposed certification requirements on SAM.gov, the government’s primary contractor registration system, and provide guidance on preparing for these potential new obligations.

Legal experts will explain the materiality standard established in Universal Health Services v. Escobar and its application to DEI-related False Claims Act allegations. This precedent-setting Supreme Court case established important limitations on False Claims Act liability that may prove crucial for organizations facing investigations.

The session will conclude with practical guidance for organizations, including strategies for assessing current DEI programs, documenting good-faith compliance efforts, addressing internal complaints, and responding effectively to government inquiries or investigations.

This legal landscape reflects the broader political and policy tensions surrounding diversity initiatives in federal contracting and higher education. As enforcement priorities shift and court challenges continue, organizations face significant uncertainty in determining how to maintain compliance while minimizing legal exposure.

The program offers continuing legal education credit for attorneys in New York and California, with 1.0 credit hours available in relevant practice areas. The presentation is designed to be valuable for both newly admitted and experienced attorneys navigating this rapidly evolving area of federal compliance and enforcement.

As the regulatory environment continues to evolve, federal contractors and higher education institutions must stay informed about their obligations and potential liability risks when accepting federal funding under the current certification framework.