What is the Status of Affirmative Action Plans and Certification in 2025?
Manufacturers that are covered federal contractors may be wondering when they are required to certify compliance with the affirmative action plan regulations. At this point, the answer is not clear and recent proposals from the Trump administration may explain why.
The Department of Labor’s (DOL) recently proposed budget for the fiscal year 2026 proposes to eliminate the Office of Federal Contract Compliance Programs (OFCCP), the agency tasked with enforcing affirmative action plans and proposes to transfer the OFCCP’s statutory program areas to other agencies. While the Trump administration rolled back many diversity, equity, and inclusion efforts, including revoking Executive Order 11246, which mandated affirmative action plans covering women and minorities, the statutory affirmative action requirements under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act of 1973 remain in effect. Under VEVRAA and Section 503, federal contractors are obligated to engage in affirmative action and maintain affirmative action plans for protected individuals with disabilities and protected veterans.
The DOL’s proposal includes having the Veterans’ Employment and Training Services enforce VEVRAA, and the EEOC enforce Section 503, rather than the OFCCP enforcing these regulations. The justification is that “the realignment of responsibilities will ensure consistent oversight while shrinking the Federal bureaucracy” and that Executive Order 14173: “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” “permanently remov[es] the primary basis for the OFCCP’s enforcement authority and program work.” If approved, the OFCCP would be eliminated next fiscal year, beginning October 1, 2025.
At this juncture, Congress must still approve the proposed budget, and there is a question as to whether the OFCCP can even be required to transfer its authority to other agencies.
What does this mean for federal contractors who must comply with VEVRAA and Section 503 affirmative action requirements? Employers are still statutorily required to engage in affirmative action efforts and maintain affirmative action plans regarding protected veterans and individuals with disabilities. While the future is unclear for the OFCCP, the statutory requirements still remain in effect and remain a legal obligation.
This post was co-authored by Labor + Employment Group lawyer Jessica C. Pinto.
Recent Supreme Court Activity with Major Implications for Government Contractors
Two recent Supreme Court matters signal major implications for government contractors. First, the Supreme Court will review whether government contractors can appeal a denial of a sovereign immunity defense in lawsuits arising from their work before the lawsuit concludes. Second, a recent Supreme Court decision provides regulators with another enforcement tool over government contractors. We address each issue in turn below and provide our takeaways for what it means for your company.
Sovereign Immunity Defense Under Review
Earlier this month, the U.S. Supreme Court granted a petition from The GEO Group, Inc. to hear a government contractor’s claim involving derivative sovereign immunity. The plaintiffs in the underlying case were detainees at a facility operated by GEO under its contract with U.S. Immigration and Customs Enforcement. They allege that GEO violated the federal Trafficking Victims Protection Act and was unjustly enriched under Colorado law by the forced labor of its detainees.
In its motion for summary judgment, GEO responded that it was entitled to derivative sovereign immunity under Yearsley v. W.A. Ross Constr. Co.. The district court rejected GEO’s argument, finding that ICE did not require or direct GEO’s allegedly violative conduct. . The Tenth Circuit Court of Appeals dismissed GEO’s appeal on jurisdictional grounds, holding that it could not review the immunity defense “completely separate” from the merits of the case.
The sovereign immunity defense that GEO raised, also known as the Yearsley doctrine, grants a government contractor immunity from liability when the government validly authorizes the contractor’s actions, and the contractor executes those actions as directed. The Yearsley doctrine allows contractors to mitigate risks in their contracts and prevents political interest groups from undermining the policies they disagree with by targeting the contractors that the government hires.
The Supreme Court will hear the case during its October 2025 term and will likely release their decision in the spring or early summer of 2026. Government contractors should closely watch the results of this case, which could have significant impacts on its ability to raise the Yearsley doctrine defense.
Increased Risk for Government Contractors in Fraud Cases
A recent Supreme Court decision, Kousisis v. United States, exposes government contractors to increased potential criminal liability for the representations they make to win business with the government. In that case, the Supreme Court upheld the conviction of a government contractor for violations of the federal wire fraud statute based on representations the contractor made in its contract with a state agency, even though the agency could not show that the contractor intended to cause the agency any economic damages.
In Kousisis, the Pennsylvania Department of Transportation solicited two contracts for bridge painting projects. PennDOT’s contracts required that a Disadvantaged Business Enterprise (“DBE”) perform a commercially useful function on the projects. At trial, the government showed that Kousisis, a project manager at Alpha Painting and Construction Company, falsely represented that Alpha would comply with this requirement. During the projects, the certified DBE used by Alpha was actually just a “pass-through” entity, which did not meet the contract requirement.
Although PennDOT did not take any issue with Alpha’s work, the government still charged Kousisis and Alpha of wire fraud and conspiracy to commit wire fraud. The Court concluded that the federal wire fraud statute encompasses fraudulent inducement, which exists when a false representation causes someone, including a governmental entity, to agree to a transaction. Wire fraud “is agnostic about economic loss. The statute does not so much as mention loss, let alone require it. Instead, a defendant violates § 1343 by scheming to ‘obtain’ the victim’s ‘money or property,’ regardless of whether he seeks to leave the victim economically worse off,” according to the Supreme Court.
Key Takeaways
Companies should consider the following issues as they navigate these recent shifts:
A ruling for GEO could be significant for contractors who often find themselves litigating state and federal claims arising from the performance of their contracts with the government. The Yearsley doctrine defense can provide immunity from liability when the government validly authorizes the contractor’s actions, and the contractor executes those actions as directed.
The Yearsley doctrine defense can substantially improve a contractor’s position in litigation, but comprehensive compliance policies and contract execution that precisely aligns with government direction will be a key component to successfully raising it.
Kousisis has significant implications for government contractors who, while trying to secure contracts, are often confronted with numerous requirements and may make various representations about their work. Even when the government is satisfied with a contractor’s work and suffers no economic harm, the contractor may still be exposed to criminal liability. Reducing or eliminating this exposure will require comprehensive business ethics and conduct policies that stress the importance of accurate representations and certifications to government customers, and guidance from experienced government contracts counsel throughout all stages of the procurement process.
Effective and robust compliance programs help mitigate risks. Compliance frameworks help promote fairness across a company’s operations. Duties of loyalty and oversight responsibilities for boards of directors require implementing a range of internal compliance controls, including effective reporting channels, to assess company risks. Further, comprehensive compliance measures facilitate the management of third-party engagement risks through diligent vetting, ongoing monitoring, and stringent payment controls.
Compliance is not only good business, but also insurance in the event of enforcement. The DOJ has consistently given credit to companies with robust compliance programs when considering enforcement resolutions, monetary penalties, and post-resolution compliance obligations. Companies with strong compliance programs are better positioned to negotiate favorable outcomes in the event enforcement actions arise, making proactive investment in compliance crucial.
FMC’s New Demurrage and Detention Invoicing Rules: What NVOCCs Must Do Now
On May 28, 2024, the Federal Maritime Commission’s (FMC) final rule on demurrage and detention (D&D) billing practices went into effect. This rule represents a significant regulatory development aimed at increasing transparency, accountability, and fairness in how D&D charges are assessed and disputed. The new rules implement the requirements provided in the Ocean Shipping Reform Act of 2022.
The new regulations — codified at 46 C.F.R. Part 541 — directly impact the invoicing processes for ocean common carriers, marine terminal operators, and non-vessel-operating common carriers (NVOCCs). Entities that fail to comply with these invoicing requirements risk losing the right to collect D&D charges altogether.
Overview of the Final Rule
The rule establishes:
Minimum required invoice content, including bill of lading and container numbers, dates related to free time and availability, rates, contact information for disputes, and required certifications.
Strict invoicing time frames with invoices required to be issued within 30 calendar days of the last date charges were incurred.
Limitations on who may be billed, ensuring that only the party with a direct contractual relationship or the consignee may be invoiced (note that the rules define “consignee” as the “ultimate recipient of the cargo” and not as merely the entity listed in the consignee box on the bill of lading).
Dispute resolution procedures, mandating that billing parties allow at least 30 days for dispute submissions and respond within 30 days.
A penalty for noncompliance, providing that invoices missing any required information are deemed invalid and unenforceable.
Three Action Items for NVOCCs
1. Update Your Rules Tariff To Preserve Your Rights
The new regulations require precise alignment between a party’s tariff provisions and its invoicing practices. NVOCCs must ensure that their rules tariffs:
Specify how and when D&D charges may be passed through to customers.
Reference the FMC-compliant dispute resolution process.
Ensure that outlays and refunds of D&D can be paid and received from their customers.
Failure to include these provisions may compromise your ability to enforce payment or recover costs.
2. Review and Modify Your Invoicing Procedures if You Issue Your Own D&D Invoices
For NVOCCs that are not simply passing through D&D invoices, your internal billing systems must now:
Track the 30-day invoicing window accurately.
Populate invoices with all required data points, including the container availability date, free time periods, specific D&D charge dates, and certifications of compliance.
Enable digital dispute channels and include direct contact information for handling invoice questions.
3. Prepare To Handle Disputes Strategically
The rules offer a structured dispute process: billed parties have 30 days to challenge charges, and billing parties must respond within 30 days. This creates a tight timeline that requires NVOCCs to:
Develop or revise dispute workflows.
Train staff on how to flag improperly issued invoices to ensure improper invoices are not paid (e.g., issued to the wrong party or missing required elements).
Inform billing parties when charges are under dispute, triggering the additional 30-day resolution window under § 541.7(c).
Federal Acquisition Regulation Overhaul Continues
Last week, the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council) released three new proposed deviations in their overhaul of the Federal Acquisition Regulation (FAR). They include:
FAR Part 18 – Emergency Acquisitions;
FAR Part 39 – Acquisition of Information and Communication Technology; and
FAR Part 43 – Contract Modifications
FAR Part 52, which contains the clauses inserted into contracts, was also modified for the newly overhauled parts. The changes to these sections continue the theme of removing clauses or paragraphs of the FAR not required by law and either deleting them or instead including them in guidance.
This blog covers changes to FAR Part 18.
Changes to FAR Part 18
Certain portions of FAR Part 18 were deleted including:
The stated scope and the definition of when emergency acquisitions are appropriate.
FAR 18.202(e) encouraging, but not requiring, the use of sustainable products and services.
FAR 18.205, which listed some “resources” including references to the National Response Framework and OFPP Emergency Acquisitions Guide.
All of these may be part of future guides issued by OFPP or the FAR Council.
A significant section of FAR Part 18 was moved from the FAR and put into an Emergency Procurement List located at https://www.acquisition.gov/emergency-procurement. By shifting it to a website, it can change at any time without notice. It is also arguably no longer a requirement and merely guidance.
Also, some things were modified when moved to the Emergency Procurement List. For instance, contracts may “directly” be awarded to 8(a) and women-owned small businesses concerns (which were previously only permitted for Service-disabled Veteran-owned Small Business concerns and Historically Underutilized Business Zone small business concerns). This assumes that “directly” means sole-source awards are permitted.
As will other FAR Parts, these changes will be subject to class deviations and eventually go through a notice and comment period. For existing contracts, these changes are not effective until the contract is modified.
Update on the SHIPS for America Act
The Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act (SHIPS for America Act) that was originally introduced in Congress in 2024 has been reintroduced in the Senate of the 119th Congress as S. 1541, with Sens. Mark Kelly, D‑Ariz., Todd Young, R-Ind., Lisa Murkowski, R-Alaska, Tammy Baldwin, D-Wis., Rick Scott, R-Fla., and John Fetterman, D-Pa., as its cosponsors. Sens. Richard Blumenthal, D-Conn., and Dan Sullivan, R-Alaska, subsequently joined as cosponsors as well. The bill has been initially referred to the Senate Committee on Commerce, Science, and Transportation.
A companion bill of the same name has been introduced as H.R. 3151 in the House of Representatives by Rep. Trent Kelly, R-Miss., on behalf of himself and 37 cosponsors — 21 Republicans and 16 Democrats. The House bill was referred to 12 different committees for consideration within their respective subject matter jurisdictions.
The numerous House committees to which the bill has been referred reflects the comprehensive scope of the bill’s proposals for revitalizing the United States as a maritime nation. While the SHIPS for America Act contains many specific legislative proposals, the principal policy objective of the SHIPS for America Act is to enhance US national security by increasing the involvement of US-built, US-flag vessels in international trade and in particular to compete with China more strategically in that trade. The provisions of the SHIPS for America Act are designed to achieve this overall policy objective in several ways.
First, the SHIPS for America Act contains provisions to establish national oversight and consistent funding for the US maritime industry. If passed, the SHIPS for America Act would create a White House-level position of Maritime Security Advisor, who in turn would lead an interagency Maritime Security Board tasked with making whole-of-government decisions to implement a national maritime strategy.
The SHIPS for America Act would also establish a Maritime Security Trust Fund similar to the dedicated trust funds for other modes of transportation that are supported by user fees, such as the Highway Trust Fund. The purpose of the Maritime Security Trust Fund would be to provide funding for federal programs that support US maritime transportation independent of the annual appropriations process, funded by duties, fees, penalties, taxes, and tariffs collected by US Customs and Border Protection.
To increase the number of US‑built, US-flag vessels engaged in international trade, the SHIPS for America Act would create a new program, the Strategic Commercial Fleet Program, with the goal of establishing a fleet of 250 privately owned US-built, US-flag, US-crewed vessels in international trade by 2030 that are also capable of serving national defense interests. The program would provide annual support payments to cover the difference in capital costs and operating costs associated with constructing and operating a US-built, US-flag vessel as compared with a fair and reasonable estimate of the costs of constructing and operating that type of vessel in a foreign shipyard or under a foreign flag.
The SHIPS for America Act would also establish a shipbuilding financial incentive program that allows the US Maritime Administration (MARAD) to aid in the construction of US-built, US-flag vessels that are not part of the Strategic Commercial Fleet, or to make investments in US shipyards and facilities that produce critical components for shipyards. The SHIPS for America Act would also make changes to MARAD’s Title XI, Capital Reserve Fund, Capital Construction Fund, and Small Shipyards Grants programs designed to encourage the construction of new vessels.
An investment tax credit of 33% would be available for investments to construct, repower, or reconstruct eligible oceangoing vessels in the United States and a 25% investment tax credit for investments in a qualified shipyard in the United States.
The SHIPS for America Act includes several provisions designed to help ensure that there will be cargo for the new vessels to carry. Among them would be an increase in the percentage of US government cargo required to be carried on US-flag vessels from 50% to 100%. Within 15 years, 10% of all cargo imported from the People’s Republic of China would be required to be carried on US-flag vessels. US-built vessels would be required to carry 10% of total seaborne crude oil exports by 2035 and 15% of total seaborne liquefied natural gas exports by 2043.
Finally, the SHIPS for America Act addresses the need for a sufficient shipyard workforce to build these new vessels and for enough mariners to crew them once they are built. Incentives for recruiting and retaining mariners and shipyard workers would include public service loan forgiveness, educational assistance under the GI Bill, and preference when applying for federal employment.
There has been commentary suggesting that some of the different ways in which the SHIPS for America Act seeks to achieve its policy objectives — direct financial support, investment tax credits, cargo preference, and workforce development, among others — could eventually be incorporated into separate bills in order to facilitate their consideration and passage. The projected costs of each of the various incentives will need to be tallied, and funding for them will need to be provided. In any event, the renewed recognition of maritime transportation’s vital role in our nation’s security is likely to provide favorable prospects for the SHIPS for America Act and similar legislative initiatives.
Navigating SAM.gov: A Guide for Government Contractors
For businesses aiming to win federal contracts, navigating the System for Award Management (SAM.gov) is a necessary — and often daunting — first step. Whether you’re a seasoned government contractor or new to federal procurement, understanding how to use SAM.gov effectively is crucial for compliance, eligibility, and success in the competitive public sector marketplace.
This guide walks you through the core functions of SAM.gov, common pitfalls, and legal tips to ensure your business stays on the right side of procurement regulations.
What Is SAM.gov?
SAM.gov is the official website of the U.S. government for contracting and award management. It consolidates multiple federal procurement systems, including:
CCR (Central Contractor Registration)
FedBizOpps (now under Contract Opportunities)
EPLS (Excluded Parties List System)
SAM.gov is where entities register to do business with the federal government, search for contract opportunities, report on contract performance, and maintain necessary compliance documents.
Entity Registration
Before bidding on federal contracts, your business must register in SAM.gov. Here’s what you’ll need:
Unique Entity ID (UEI) – As of April 2022, replaces the DUNS number
TIN/EIN – A valid taxpayer identification number or employer identification number
Banking Info – For payment via the federal System for Award Management
NAICS Codes – Identify your industry categories for contract eligibility
CAGE Code – Issued automatically during the SAM registration process
Legal Tip: Ensure that your entity name and TIN exactly match IRS records. Mismatches are a common cause of registration delays or rejections.
Navigating Contract Opportunities
SAM.gov serves as the central hub for federal contract solicitations. You can search for opportunities by:
Agency
Set-aside type (e.g., small business, 8(a), HUBZone)
NAICS code
Location
Best Practice: Set up a user account and create saved searches or email alerts to receive real-time updates tailored to your business profile.
Representations and Certifications
When registering, you must complete the “Reps & Certs” section, which includes key affirmations under the Federal Acquisition Regulation (FAR) and other rules.
This section covers:
Business size standards
Socio-economic ownership status (e.g., woman-owned, veteran-owned)
Eligibility for certain government contract opportunities
Compliance with laws such as the Buy American Act
Legal Tip: Misrepresenting your business status (intentionally or not) can lead to penalties under the False Claims Act and/or lead to suspension or debarment. Periodically review and update your certifications to ensure ongoing accuracy.
Staying Compliant and Active
A SAM.gov registration must be renewed annually, but it’s best to review it more frequently for accuracy.
Key compliance reminders:
Update contact information and ownership structure changes promptly
Track your expiration date and start renewal at least 30 days prior
Review FAR and DFARS clauses that apply to your business category
Warning: Lapsed or inaccurate registration can disqualify you from contract awards or delay payments.
Common Pitfalls to Avoid
Incomplete Registration – Missing data, especially banking or IRS info, will stall the process.
Expired Login Credentials – SAM.gov uses Login.gov for access. Inactive accounts can lock you out.
Scams and Third-Party Solicitors – Only use official .gov channels. Watch out for unofficial “registration help” services that charge unnecessary fees.
Not Reading Solicitations Carefully – Every contract opportunity on SAM.gov may have different requirements. Don’t assume they’re standardized.
Final Thoughts
SAM.gov is a powerful tool that connects contractors with billions in federal spending opportunities. But navigating it requires diligence, accuracy, and an understanding of legal obligations under federal procurement law. Contractors should consider consulting legal counsel or compliance advisors to mitigate risk and stay competitive.
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Minnesota Contractors’ Workforce Compliance Requirements, Part III: Workforce Certificate Audits
The Minnesota Department of Human Rights (MDHR) recently made updates to several documents and definitions for Minnesota government contractors. This is the third article in a series focused on the compliance responsibilities of Minnesota contractors holding workforce certificates that the MDHR issued. The first part in the series covered the workforce certificate application, affirmative action program template, annual compliance report (ACR), ACR instructions, and nondiscrimination poster. Part two covers the Minnesota Equal Pay Certificate. In part three, we discuss workforce certificate audits. The Minnesota Department of Human Rights (MDHR) may request information from a workforce certificate holder to evaluate the contractor’s efforts to implement its compliance plan to maintain a workforce free from discrimination under the Minnesota Human Rights Act (MHRA). According to the MDHR, workforce certificate holders can expect to be audited at least once during each four-year certification period. These audits may involve on-site reviews.
Quick Hits
The MDHR conducts audits (including on-site visits) of workforce certificate holders’ efforts to comply with the MHRA and contractors’ compliance plans.
The MDHR is likely to conduct audits of workforce certificate holders at least once during each four-year certification period.
How Does the MDHR Analyze Workforce Certificate Compliance?
In determining a contractor’s workforce certificate compliance, the MDHR may analyze:
the contractor’s compliance with Minnesota’s anti-discrimination laws, MN Rules 5000.3400 to 5000.3600;
the contractor’s compliance with contractual equal opportunity terms;
whether the contractor’s efforts to implement its compliance plan are sincere;
whether the contractor promptly addresses identified deficiencies;
whether the contractor submitted timely annual compliance reports (ACRs); and
whether the contractor permitted the on-site compliance review and readily made records and documents available for review.
What Does a Workforce Certificate Audit Involve?
Minnesota contractors selected for audit will receive a letter from the MDHR requesting data and information to be submitted within thirty days of the audit letter date. Contractors may request additional time to respond by calling the MDHR. Although the MDHR is currently in the process of updating information on its website related to workforce certificate audits, it is reasonable to expect the MDHR to investigate adherence to the MHRA and the contractor’s compliance plan requirements, such as proof that:
the contractor has conducted nondiscrimination training for all personnel involved in recruitment, screening, selection, promotion, and discipline;
the contractor at least annually reviews its job descriptions to ensure their requirements do not screen out qualified individuals with disabilities, that requirements are job-related and consistent with business necessity and safe performance of the job, and changes to job descriptions are distributed to relevant employees, like recruiters and hiring managers;
pre-employment inquiries and application forms satisfy state law requirements concerning not requiring criminal records or criminal history before the interview or conditional offer stage of the hiring process, unless permitted by state or federal law;
pre-employment inquiries and application forms do not ask about past or current pay;
the contractor is maintaining records to complete its ACR, including records concerning applicants, applicants tested, applicants interviewed, hires, promotions, demotions, transfers, employment terminations, and employees trained on MDHR compliance plan requirements;
the contractor regularly distributes its EEO policy to employees and new hires during orientation;
the contractor’s EEO policy and MDHR’s “Our Commitment to a Workplace Free From Discrimination” poster (2025 version) have been posted at all worksites covered by the compliance plan and workforce certificate;
employee performance is evaluated in part for compliance with the contractor’s EEO policy and other anti-discrimination policies;
information obtained in response to medical inquiries and exams is kept confidential;
the contractor is maintaining all job postings and that the postings state that the contractor does not discriminate against applicants on the basis of their race, color, national origin, religion, creed, disability, age, sex, sexual orientation, gender identity, marital status, familial status, status with regard to public assistance, or membership or activity in a local human rights commission;
all positions for which the contractor posts or advertises externally are listed with the State of Minnesota’s Workforce Centers, America’s Job Bank, or similar government agencies, and the contractor maintains documentation of contacts made and responses received, including requests to the Minnesota Department of Employment and Economic Development to refer qualified individuals with disabilities for employment consideration;
the company is reaching out to community organizations and recruiting programs at schools and colleges focused on employment of women, people of color, and individuals with disabilities; and
documentation of requests for accommodations for disabilities and religious observances and practices has been retained.
Conclusion
Minnesota contractors holding an active MDHR workforce certificate can expect to be audited at least once during their four-year certification period. The MDHR has broad discretion in conducting audits, which will focus on what contractors agreed to do in their workforce certification applications and compliance plans. Failure to provide requested materials or allow access to records in an audit may result in suspension or revocation of a contractor’s workforce certificate and possibly termination of a contractor’s state agency contracts.
Oregon Targets Corporate Practice of Medicine with Enacted Bill: What SB 951 Means for MSOs, PE-Backed Physician Groups, and Physicians
Overview of SB 951
Oregon Governor Tina Kotek on Monday, June 9, 2025, signed a first-of-its-kind law that significantly reshapes the state’s regulatory landscape for non-physician investment in medical practices. Senate Bill 951 (“SB 951” or the “Law”) imposes broad restrictions on how non-professional parties, such as private equity firms and other non-physician investors, participate in the ownership, management, and operation of medical practices in Oregon. The Law strengthens and expands Oregon’s existing corporate practice of medicine (“CPOM”) prohibition, directly impacting the way investors, management services organizations (“MSOs”), and professional medical entities structure their relationships. The Law has garnered national attention for its aggressive stance on limiting corporate involvement in healthcare and signals an evolving trend in the state regulation of private equity (and other investor) backed medical practices.
Understanding CPOM Restrictions
A majority of U.S. states (“CPOM States”) recognize some form of CPOM restriction, which generally prohibits unlicensed individuals or non-professional legal entities from owning, operating, or controlling medical practices, or from employing or contracting with physicians to provide medical services to the general public. These CPOM restrictions are intended to prevent non-licensed investors from influencing physicians’ clinical decision-making or from having de facto control over medical practices. The source of CPOM restrictions varies by state, but often are derived from a combination of professional licensure statutes, case law, attorneys general opinions, and regulatory body opinions.
In many CPOM States, a common approach to enable non-physician investment in medical practices, while remaining compliant with applicable CPOM restrictions, is the use of the PC-MSO model. Under this model, a medical practice (i.e., a professional corporation (PC), professional limited liability company (PLLC), or a similar professional entity) is owned exclusively by one or more physicians (unless a particular state’s laws permit minority ownership by non-physicians), and all clinical responsibilities and decision-making authority is reserved exclusively to the physician owners, employees, and contractors. At the same time, an investor forms and operates an MSO (which may be owned, in part, by the same physicians that own the medical practice) that contracts with the medical practice for the provision of all of the non-clinical management, administrative, and business support services necessary to run the medical practice, and the MSO receives a fair market value fee from the medical practice in exchange for such services. This arrangement allows the physicians to focus on providing medical services, while outsourcing non-clinical responsibilities to the MSO.
To promote further alignment between the investor-owned MSO and the medical practice, and to maintain continuity of care and operations of the medical practice, the medical practice physician owners typically enter into a succession agreement (also referred to as a stock transfer restriction agreement, option agreement, or equity transfer agreement) with the MSO and/or the medical practice. Under this agreement the physician owners of the medical practice are restricted from selling or encumbering their equity in the medical practice, or encumbering the assets of the medical practice, without the MSO’s consent. The succession agreement also allows the MSO to require a physician owner of the medical practice to transfer or sell their equity interests in the medical practice to another physician upon the occurrence of certain triggering events, such as the physician’s death, disability, loss of license, or disassociation from the medical practice or the MSO.
Codification of CPOM Restrictions and Narrowing of MSO Control
SB 951 codifies Oregon’s pre-existing CPOM restrictions and takes further aim at private equity-backed PC-MSO arrangements by prohibiting, subject to limited exceptions, MSOs (and their shareholders, directors, members, managers, officers, and employees) from owning or controlling (individually, or in combination with the MSO or any other shareholder, director, member, manager, officer or employee of the MSO) a majority of the shares in a “professional medical entity” (which includes medical, nursing and naturopathic PCs, and LLCs, LPs and partnerships organized for a medical purpose) with which the MSO has a contract for management services, and from serving as directors or officers, being employees of, or working as independent contractors with (or receiving compensation from) the MSO to manage or direct the management of the professional medical entity that has a management agreement with the MSO.
While PC-MSO arrangements are typically structured to delineate the clinical responsibilities and authority of the medical practice from the non-clinical operations and business support services provided by an MSO, SB 951 further restricts the ability of MSOs to exercise “de facto” control over the administrative or business operations of the professional medical entity, including by prohibiting MSOs (and their shareholders, directors, members, managers, officers, and employees) from exercising ultimate decision-making authority over, among other things, setting policies for patient billing and collection, and negotiating, executing, performing, enforcing or terminating contracts with third-party payors or persons that are not employees of the professional medical entity.
SB 951 also significantly impacts the use of succession agreements with physician owners of professional medical entities, permitting only the following triggering events:
Suspension or revocation of a physician’s medical license in any state;
A physician’s disqualification from holding ownership in the professional medical entity;
A physician’s exclusion, debarment, or suspension from a federal healthcare program, or if the physician is under an investigation that could result in such actions;
A physician’s indictment for a felony or other crimes involving fraud or moral turpitude;
The professional medical entity’s breach of a management agreement with an MSO; or
The death, disability or permanent incapacity of a physician.
Consequences of Violating CPOM Restrictions
The Law also expressly provides that a physician or professional medical entity that suffers an ascertainable loss of money or property as a result of a violation of the above prohibitions may bring an action against an MSO with which the medical licensee or professional medical entity has a contract for management services, or a shareholder, director, member, manager, officer or employee of such MSO, in an Oregon circuit court to obtain: (i) actual damages equivalent to the physician’s or professional medical entity’s loss; (ii) an injunction against an act or practice that violates the prohibition; and (iii) other equitable relief the court deems appropriate. A court may also award punitive damages and attorneys’ fees and costs to a plaintiff that prevails in such an action, increasing the potential financial consequences for the defendant.
Additional Restrictions on Non-Competition, Non-Disclosure and Non-Disparagement Agreements
SB 951 also targets the use of nondisclosure, noncompetition and nondisparagement agreements with medical licensees, which could be used by businesses to silence criticism of their operations and management practices. Oregon law already placed restrictions on the use of noncompetition agreements, but with the enactment of SB 951, subject to limited exceptions, noncompetition agreements that restrict the practice of medicine or the practice of nursing are now void and unenforceable between a medical licensee (i.e., a physician, nurse practitioner, physician associate, and practitioner of naturopathic medicine) and an MSO, a hospital (as defined in ORS 442.015) or hospital-affiliated clinic (as defined in ORS 442.612), or any other “person” (as defined in ORS 442.015).
Under the Law, a noncompetition agreement is still valid if the medical licensee is a shareholder or member of the other “person” or otherwise owns or controls an ownership interest and that ownership interest is equal to or exceeds 10% of the entire ownership interest of that person, or the medical licensee owns less than 10% but the medical licensee has not sold or transferred the ownership interest. A noncompetition agreement is also valid, but only for three years after the medical licensee was hired, if it is with a professional medical entity that provides the medical licensee with documentation of the professional medical entity’s protectable interest (i.e., that the costs to the entity – such as for recruiting the employee, sign-on bonus, and education or training in the entity’s procedures – are equal to 20% or more of the annual salary of the medical licensee).
SB 951 also permits a noncompetition agreement if the medical licensee is a shareholder or member of a professional medical entity and has a noncompetition agreement with the professional medical entity, provided the professional medical entity does not have a management agreement with an MSO or if it has a management agreement but the professional medical entity is the MSO or owns a majority of the ownership interests of the MSO. In addition, noncompetition agreements remain valid if the medical licensee does not engage directly in providing medical services, health care services or clinical care.
In addition, the Law specifies that nondisclosure agreements and nondisparagement agreements between a medical licensee and an MSO, or between a medical licensee and a hospital (as defined in ORS 442.015) or hospital-affiliated clinic (as defined in ORS 442.612), if either the hospital or the hospital-affiliated clinic employs a medical licensee, are void and unenforceable, unless the MSO, hospital or hospital-affiliated clinic terminated the medical licensee’s employment or the medical licensee voluntarily left employment with the MSO, hospital or hospital-affiliated clinic, or if the nondisclosure agreement or nondisparagement agreement is part of a negotiated settlement between the medical licensee and an MSO, hospital or hospital-affiliated clinic. Such nondisclosure agreements and nondisparagement agreements cannot, however, be enforced by an MSO, hospital or hospital-affiliated clinic for the medical licensee’s good faith reporting of information to a hospital or hospital-affiliated clinic or a state or federal authority that the medical licensee believes is evidence of a violation of a state or federal law, rule or regulation. Further, the Law prohibits MSOs and professional medical entities from taking an adverse action against a medical licensee as retaliation for, or as a consequence of, the medical licensee’s violation of a nondisclosure agreement or nondisparagement agreement or because the medical licensee in good faith disclosed or reported information to an MSO, hospital, hospital-affiliated clinic, or state or federal authority that the medical licensee believes is evidence of a violation of a federal or state law, rule or regulation.
Market Impact
Oregon’s enactment of SB 951 reflects growing momentum across several states to curtail private-equity and other non-physician investment in medical (and other healthcare) practices.
Notably, over the past two years, legislators in California, Washington, Illinois, Indiana, Massachusetts, New Mexico, and New York have either proposed or passed laws heightening regulatory scrutiny of healthcare transactions or corporate ownership or control of healthcare entities[1]. SB 951 may very well serve as a model for CPOM legislation in other jurisdictions.
While the legislative intent behind the Law is to protect the clinical independence of providers and professional medical entities, its broad scope may have the unintended effect of deterring investment in Oregon’s healthcare market, potentially narrowing the pool of potential buyers for medical (and other healthcare) practices, and subsequently impacting market valuations.
What Comes Next
The CPOM-related restrictions first apply on January 1, 2026 to MSOs and professional medical entities incorporated or organized in Oregon on or after June 9, 2025, and to sales or transfers of ownership in such MSOs or professional medical entities that occur on or after June 9, 2025. The CPOM-related restrictions first apply on January 1, 2029 to MSOs and professional medical entities that existed before June 9, 2025, and to sales or transfers of ownership interests in such MSOs or professional medical entities that occur on or after January 1, 2029. The restrictions on noncompetition, nondisclosure, and nondisparagement agreements apply to contracts that a person enters into or renews on and after June 9, 2025.
Stakeholders with medical operations or investment activity in Oregon should begin preparing now. Key action items for stakeholder consideration may include:
Evaluating whether existing PC-MSO arrangements are compliant with the enacted Law;
Reviewing management and employment agreements for provisions that may soon be unenforceable;
Develop alternative investment and operating models that comply with SB 951’s restrictions; and
Exploring alternatives to succession agreements and restrictive covenant agreements to ensure continued alignment with physician owners of medical practices.
Pending Legislation
On the heels of SB 951, the Oregon legislature is considering a new bill, HB 3410, which seeks to amend the recently enacted SB 951 by tightening and clarifying certain key provisions. Among others, HB 3410 would expand the professional medical entity ownership and control prohibitions to also apply to independent contractors of an MSO, which were previously omitted from SB 951, and slightly relax certain exceptions to the ban on noncompetition agreements with medical licensees. HB 3410 has passed in Oregon’s House of Representatives and is now before Oregon’s Senate Committee on Rules, with many expecting that it will be passed by the Senate and ultimately signed by the Governor.
We continue to monitor developments across the country regarding the potential codification and ongoing enforcement of CPOM restrictions. In light of heightened legislative focus and regulatory scrutiny, we strongly encourage all stakeholders to reassess their healthcare investment strategies and organizational structures to ensure alignment with the evolving legal landscape.
FOOTNOTES
[1] State Healthcare Transaction Laws, https://discover.sheppardmullin.com/state-healthcare-transaction-laws/.
DOJ’s Data Security Program: Key Compliance Considerations for Impacted Entities
Go-To Guide
The Department of Justice’s new Data Security Program (DSP), effective April 8, 2025, imposes significant restrictions on U.S. government contractors and global companies that handle sensitive U.S. personal or government-related data.
U.S. persons and organizations that transfer, share, or provide access to such data must assess whether their transactions involve designated countries of concern and covered persons.
The DSP requires new due diligence, recordkeeping, reporting, and annual auditing obligations, with full enforcement beginning July 8, 2025. Non-compliance can result in severe civil and criminal penalties.
On April 11, 2025, the DOJ’s National Security Division (NSD) issued a Compliance Guide, Implementation and Enforcement Policy, and FAQs for its Data Security Program (DSP), finalized pursuant to Executive Order 14117 and the 28 C.F.R. Part 202. The DSP is primarily designed to prevent certain cross-border data flows and transactions. Individuals and companies subject to the DSP are required to comply with new security requirements, reporting and recordkeeping duties, and due diligence rules.
The recently issued guidance makes evident NSD’s intent to make the DSP an enforcement priority for this administration. Access to Americans’ bulk sensitive or personal data or U.S. government-related data increases the ability of countries of concern to engage in a wide range of malicious activities. The DSP is currently subject to a 90-day initial enforcement period, which is a limited enforcement window to give individuals and companies additional time to bring their transactions and processes into compliance with the DSP. After July 8, 2025, NSD will implement full enforcement of the DSP.
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Minnesota Contractors’ Workforce Compliance Requirements, Part II: Equal Pay Certificates
The Minnesota Department of Human Rights (MDHR) recently updated several documents on its website for Minnesota government contractors. This is the second article in a series focused on the compliance responsibilities of Minnesota contractors holding workforce certificates that the MDHR issued. The first part in the series covered the workforce certificate application, affirmative action program template, annual compliance report (ACR), ACR instructions, and nondiscrimination poster. In part two, we discuss the Minnesota Equal Pay Certificate, the purpose of which is to ensure that contractors doing business with Minnesota government agencies pay men and women equal wages for equal work.
Quick Hits
Employers with contracts exceeding $500,000 with Minnesota state agencies and that have forty or more full-time employees in Minnesota or in the state of their primary place of business must obtain an equal pay certificate.
To apply for an equal pay certificate, contractors must hold a current MDHR workforce certificate, complete an online application, and pay a $250 fee.
The MDHR conducts compliance reviews of contractors holding equal pay certificates to ensure adherence to equal pay laws, with potential penalties for noncompliance including fines and revocation of the certificate.
Who Must Obtain an Equal Pay Certificate?
Employers with contracts for goods and services exceeding $500,000 with the State of Minnesota (including its departments, agencies, colleges, and universities), and various metropolitan agencies, with forty or more full-time employees in Minnesota or in the state of their primary place of business, must obtain an equal pay certificate.
In addition, employers (wherever located) with contracts exceeding $500,000 with the University of Minnesota for a capital project funded by a general obligations bond must likewise obtain an equal pay certificate, as must employers with contracts with Minnesota cities, counties, and other political subdivisions for a capital project funded by a general obligations bond exceeding $1 million.
Some businesses are exempt by statute based on the type of contract. For example, certain contracts for healthcare services, health insurance, investment options with the State Board of Investments, and others are exempt.
Minnesota vendors must hold a current equal pay certificate to bid on or obtain Minnesota state contracts exceeding $500,000. Equal pay certificates are tied to a company, not a contract, and are valid for four years.
How to Obtain an Equal Pay Certificate
Employers seeking an equal pay certificate must first register with the Office of the Minnesota Secretary of State and must already hold a current Minnesota Department of Human Rights (MDHR) workforce certificate.
To apply for or renew an equal pay certificate, Minnesota contractors must complete an online application and pay a $250 application fee. The application must be signed by the company’s highest-ranking official (e.g., president, CEO, or board chair).
The application must include basic company information, provide a company contact name and contact information, a description of the goods and/or services provided to the Minnesota government agency or agencies, and a list of facility addresses covered by the equal pay certificate.
The application contains an equal pay compliance statement wherein the highest-ranking company official must affirm the following:
compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Minnesota Human Rights Act, the Minnesota Fair Labor Standards Act, and the Minnesota Equal Pay for Equal Work Law;
the average compensation for women is not consistently below the average compensation for men, considering mitigating factors, as reported in each major EEO-1 report job category (i.e., Officials and Managers, Professionals, Technicians, Sales, Office/Clerical, Skilled Crafts, Operatives, Laborers, and Service Workers). Mitigating factors include, for example: length of service, requirements of specific jobs, experience, skill, effort, responsibility, and working conditions of the job;
how often the company evaluates wages and benefits for compliance with federal and state law;
the methodology used by the company to determine compensation: market pricing, internal pricing, performance pay system, state prevailing wage, union contract requirement, and/or other. If “other,” the contractor must provide a description of the methodology used; and
retention and promotion decisions are made without regard to gender and do not limit employees based on gender to certain job classifications.
The highest-ranking company official must also affirm that the employer will:
furnish pertinent compensation data, analyses, records, and audit responses to MDHR upon request;
promptly correct wage, benefits, and other compensation disparities; and
retain records of employees’ names, daily hours worked, and rate(s) of pay for at least three years.
The MDHR will issue an equal pay certificate or a letter explaining why the application was rejected within fifteen days of the MDHR receiving the contractor’s application.
MDHR Compliance Reviews
Minnesota contractors holding an equal pay certificate are subject to compliance reviews by the MDHR to evaluate compliance with equal pay laws. The MDHR has broad discretion to request documents to determine compliance. In an equal pay audit, the MDHR typically requests the following information for each major EEO-1 report job category:
Number of male employees
Number of female employees
Average annualized salaries paid to male employees and to female employees
Information on performance payments, benefits, and other elements of compensation
Average length of service for male and for female employees
If the MDHR determines that a contractor is not in compliance with the equal pay laws, the MDHR may issue a variety of remedial actions, such as:
requiring the contractor to revise its policies;
obtaining wages and benefits due to employees;
issuing fines of up to $5,000 per calendar year for each contract;
revoking or suspending the equal pay certificate; and/or
seeking modification or termination of the contract.
Refusal to provide data and information requested in a compliance review may also result in suspension or revocation of the equal pay certificate and the inability to bid for or obtain Minnesota state government contracts.
Contractors may challenge an action undertaken by the MDHR by filing an appeal with the Office of Administrative Hearings.
Data Privacy
Data and information submitted as part of the application and compliance review process are kept privileged and confidential. However, the MDHR commissioner’s decision to issue, not issue, revoke, or suspend an equal pay certificate is public data. The list of equal pay certificate holders is published on the MDHR’s website. The MDHR may share information with other government agencies such as the Minnesota Attorney General’s Office, the Minnesota Department of Labor and Industry, U.S. Department of Labor, U.S. Equal Employment Opportunity Commission, and Minnesota state and local government agencies to assist in compliance investigations.
Conclusion
To make the affirmations required in the equal pay certificate application, Minnesota government contractors may want to analyze the wages of their employees expected to perform work on Minnesota contracts by EEO-1 report job category for disparities based on sex. If they identify pay disparities based on sex that are not explained by mitigating factors, then they may want to take prompt corrective action. Contractors may want to conduct these analyses regularly throughout the four-year equal pay certificate certification period. Per the MDHR’s website, contractors holding an equal pay certificate should expect to be audited by the MDHR sometime during their four-year certification period.
Enhanced AFCA Empowers Agency Fraud-Fighting, Creates Compliance Concerns for Federal Contractors and Others
Takeaways
The Administrative False Claims Act expands federal agencies’ authority to investigate and resolve false claims independently.
The $1 million monetary threshold for administrative claims allows agencies to handle larger fraud cases without going through judicial processes.
Entities interacting with federal agencies could lower risks by enhancing their internal compliance programs and emphasizing accurate documentation and reporting.
Article
Significant revisions to the Program Fraud Civil Remedies Act of 1986 (PFCRA), now called the Administrative False Claims Act (AFCA), bolster federal agencies’ ability to address alleged fraud by expanding their authority to pursue and resolve false claims administratively. Government contractors, grant recipients, and other entities engaged with federal programs should consider the implications of the revisions passed in the National Defense Authorization Act (NDAA) for fiscal year 2025, enacted on Dec. 23, 2024.
Background: False Claims Act, AFCA
The AFCA, formerly known as the PFCRA, provides federal agencies with an administrative mechanism to address false claims and statements made to the government. Unlike the False Claims Act (FCA), which typically involves judicial proceedings and “larger” claims, the AFCA allows agencies to investigate and resolve “small” fraud cases internally and impose civil penalties, damages, and assessments without court intervention. This administrative approach streamlines the process, enabling faster resolution of claims while maintaining enforcement against fraudulent activities.
Historically, the federal government most frequently deployed the FCA against government fraud. Under the AFCA, agencies typically investigate possible violations and their findings are reviewed by an independent agency official who determines whether adequate evidence of a false claim or statement exists. If so, the matter is referred to the Department of Justice (DOJ). If DOJ declines to litigate the case, the agency can bring an administrative action with DOJ approval.
The AFCA requires agencies to issue implementing guidance on their investigative and administrative hearing process. Although many agencies’ administrative enforcement under the AFCA has been infrequent, that may change following the latest revisions.
Key Revisions
The 2025 NDAA introduced several substantive changes to the AFCA, aimed at modernizing and strengthening its enforcement capabilities. The most significant updates include:
1. Renamed Administrative False Claims Act
The statute has been officially renamed the Administrative False Claims Act, reflecting an expanded scope and alignment with broader anti-fraud efforts and clarifying the focus on addressing false claims administratively across federal programs.
2. Increased monetary threshold for administrative claims
The 2025 NDAA raises the ceiling for administrative claims from $150,000 to $1 million, significantly expanding the scope of cases that federal agencies can handle administratively without resorting to judicial processes, streamlining enforcement, and reducing litigation costs. The law also provides for periodic adjustments to this threshold for inflation, ensuring relevance over time.
3. Expanded agency authority
Broader authority to federal agencies to independently investigate and resolve false claims and statements enhances agencies’ ability to act swiftly and decisively against fraud. Agencies can now pursue cases involving fraudulent claims for payment or approval, as well as false statements made knowingly to obtain government benefits or contracts.
4. Compliance deadline for agencies
The NDAA mandates that federal agencies update their regulations and procedures to comply with the revised AFCA by June 21, 2025.
5. Enhanced penalties, assessments
The AFCA continues to allow agencies to impose civil penalties and assessments on individuals or entities that knowingly submit false claims or engage in fraudulent conduct.
Implications for Government Contractors, Grant Recipients
The revisions to the AFCA have significant implications for entities, including government contractors, grant recipients, and healthcare providers, that interact with federal agencies. Key considerations for such entities include:
Heightened compliance risks: Businesses and individuals face greater scrutiny for claims submitted to federal programs. Implementing robust compliance programs, including regular audits and employee training, are essential to mitigate the risk of AFCA violations.
Increased enforcement activity: Federal agencies are now better equipped to pursue fraud cases administratively, which could lead to a rise in investigations and enforcement actions. Entities should be prepared for more oversight and ensure accurate documentation and reporting in all government interactions.
Whistleblower protections: The FCA’s whistleblower protections, which prohibit retaliation against employees who report fraud, remain relevant in the AFCA. Organizations should foster a culture of transparency and protect employees who raise concerns about potential violations.
Easier administrative enforcement: The increased AFCA liability ceiling could make the administrative process more appealing to agencies looking for a quicker path to recovery.
What Can Contractors Do?
Navigating the FCA and AFCA requires a proactive approach to compliance and a comprehensive understanding of the evolving enforcement landscape. Contractors should consider working with counsel to develop robust compliance programs, conduct internal investigations when billing or compliance issues arise, train leaders in how to spot and address potential fraud, waste, and abuse, and review internal policies and conduct risk assessments.
Impact of the DOJ’s Civil Rights Fraud Initiative on Higher Education
On May 19, 2025, the U.S. Department of Justice (“DOJ”) announced the “Civil Rights Fraud Initiative” to broaden federal enforcement of federal civil rights laws through the use of the False Claims Act. This initiative has implications for universities, government contractors, and other recipients of federal funds, and may expose them to increased liability for civil rights violations alleged by private citizens.
The initiative’s stated goal is to investigate and, as appropriate, pursue claims against federal funding recipients who knowingly violate federal civil rights laws – including Title VI and Title IX – through the use of the False Claims Act. The DOJ’s May 19, 2025 memo specifically highlights federal enforcement concerns related to DEI programs, antisemitism, and transgender inclusion on college campuses, explaining the DOJ’s view that “a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions” and that “schools continue to adhere to racist policies and preferences – albeit camouflaged with cosmetic changes that disguise their discriminatory nature.” These enforcement objectives appear to relate to the administration’s previously stated interpretations of federal civil rights laws with regard to of race-based preferences, certain DEI programming, and sports participation.
Many institutions of higher education receive federal funds through Title IV federal financial aid programs and federal research grants and contracts. As a condition of receiving those moneys, institutions of higher education are required to certify their compliance with federal civil rights laws. The initiative’s use of the False Claims Act as an enforcement mechanism heightens the possibility of that these certifications will be used to demonstrate that the institutions of higher education have made “knowingly false” claims to the federal government about their civil rights compliance in order to receive federal funds. Further, the False Claims Act permits whistleblower actions initiated by private citizens against organizations that have allegedly defrauded the government, heightening the possibility that third parties with no relationship with institutions may seek to bring whistleblower claims.
The impact of False Claims Act allegations can be wide-ranging. At a minimum, institutions who receive a civil investigative demand (CID) under the False Claims Act should be prepared to preserve and produce documents in response to large document requests, and present witnesses for interrogatories and testimony. Institutions who are found to have violated the False Claims Act could be liable to the federal government for treble damages and civil penalties, as well as to whistleblowers for litigation costs and attorney’s fees.
The Civil Rights Fraud Initiative is co-led by attorneys from the DOJ’s Civil Division Fraud Section and attorneys from the DOJ’s Civil Rights Division, as well as an Assistant United States Attorney from each of the 94 federal districts. The initiative will also work closely with the DOJ’s Civil Division and other relevant federal agencies, such as the U.S. Department of Education and the U.S. Department of Health and Human Services. These agencies may work together to investigate alleged civil rights violations prior to pursuing a Federal Claims Act matter, and institutions should expect that investigations may be both quick and broad, and be followed by demands for settlement and/or a lawsuit.
How Institutions Can Prepare
Institutions of higher education should think about how they will respond if faced with False Claims Act allegations related to their DEI programs, approach to student protests and antisemitism, and transgender issues , as outlined in the DOJ’s May 19, 2025 memo. Institutions should also consider conducting attorney-client privileged audits of programs and policies on their campuses to ensure compliance with federal and state civil right laws and to seek legal advice and counsel on best practices. Finally, institutions should review their whistleblower policies and confidential reporting protocols to ensure that internal whistleblowers – faculty, staff, students – understand how to confidentially report their concerns to the university, and how the university staff who receive those whistleblower reports respond consistent with university campus and/or Board policy. Institutions that are the subject of False Claims Act allegations should consult with legal counsel before responding.
Institutions should also be aware of developments in the certification requirements that the federal government imposes as a condition of receiving federal funding, and how courts have assessed the administration’s interpretations of federal civil rights laws to date. Certifications may be presented at the time that a university program or researcher is granted federal funding. As noted in our May 2, 2025 client alert, the certification language requested by the Department of Education for K-12 public school districts and states has been enjoined, and there may be additional legal challenges to proposed certification language, including in the higher ed context. Institutional leaders should have an ongoing awareness of what programs their institution is conducting, and whether those programs comply with any required federal civil rights certification language.