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Sunday, July 6, 2025

DEI Injunction Terminated by Federal Court of Appeals Reinstating DEI Certification Requirement and Civil False Claims Act Risk - Foley & Lardner LLP

As previously reported, one of the first executive orders (EO 14173) issued by President Trump was to rescind Executive Order 11246, issued by President Lyndon B. Johnson, which required federal contractors and subcontractors to engage in affirmative action with respect to women and minorities. In EO 14173, President Trump also directed those federal agencies contracting with all entities to cause the end of all “illegal” DEI and DEIA programs by — among other things — requiring federal contractors and subcontractors to “certify” that they do “not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” As also reported, this “certification” requirement gives rise to potentially significant exposure for contractors under the civil False Claims Act if a contractor was later found to have “falsely” submitted its certification — i.e., that it was maintaining an “illegal” DEI or DEIA program.

Not long after issuance of EO 14173, litigation was initiated, challenging the executive order as unconstitutionally vague and a violation of the First Amendment, among other arguments: The DEI-related provisions, including the certification requirement, based on the failure of the executive order to define or provide any guidance as to what would be considered an “illegal” DEI or DEIA program. In essence, the plaintiffs asserted that, without some defining guidance, the executive order was overly broad and could lead to significant exposure for...



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