The National Institutes of Health announced a new civil rights certification requirement for grant recipients, mandating they certify their DEI programs to comply with federal antidiscrimination law or face potential False Claims Act enforcement.
What happened
On April 21, 2025, the NIH announced new civil rights terms for all grants, cooperative agreements and other transaction awards through Notice NOT-OD-25-090. The new term requires recipients to certify they operate no diversity, equity and inclusion programs that violate federal antidiscrimination law. Recipients must also certify they do not participate in discriminatory prohibited boycotts, specifically those targeting Israeli companies or businesses operating in Israel.
The certification applies immediately to new NIH funding actions and to renewal, supplement or continuation awards. NIH gains authority to terminate awards and recover expended funds if recipients violate these requirements during the award term. The agency specifically labels compliance as "material to the government's payment decisions for purposes of" the False Claims Act.
Going deeper
The new certification references President Donald Trump's Executive Order 14190 from January 29, 2025, which defines "discriminatory equity ideology." Recipients face potential treble damages plus penalties under the False Claims Act if they falsely certify compliance with conditions material to government payment decisions.
The Department of Justice issued a memorandum on May 19 announcing a Civil Rights Fraud Initiative targeting grant recipients with DEI programs. The initiative uses the False Claims Act as the primary enforcement mechanism against federal funding recipients who knowingly violate civil rights laws while falsely certifying compliance. The DOJ's Civil Rights Division and Civil Fraud Section co-lead this initiative with assistance from 93 US attorney's offices.
FCA settlements and judgments reached nearly $3 billion in fiscal year 2024, coinciding with the highest number of whistleblower lawsuits ever filed.
What was said
According to DOJ's May 19 memorandum: "The False Claims Act is implicated whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin."
NIH stated the new provision "supersedes the current NIH Grant Policy Statement (GPS) Section 4.1.2, Civil Rights Protections" and that it "will update its GPS accordingly."
DOJ's memorandum "strongly encourages" whistleblower activity under the False Claims Act.
By the numbers
- FCA settlements and judgments: nearly $3 billion in fiscal year 2024
- Whistleblower qui tam relators can keep up to 30% of amounts recovered
- 93 US attorney's offices will assist with the Civil Rights Fraud Initiative
- Fiscal year 2024 saw the highest number of whistleblower qui tam lawsuits ever filed
In the know
The False Claims Act provides for treble damages plus penalties for submitting false claims for government payment. Qui tam provisions allow whistleblowers to enforce the statute by filing lawsuits on behalf of the government. The superseded NIH Grant Policy Statement Section 4.1.2 previously required recipients to comply with federal civil rights laws prohibiting discrimination based on race, color, national origin, disability, age and sex, and take steps to ensure individuals with limited English proficiency could access health and social services.
Why it matters
This certification specifically targets life sciences companies receiving NIH funding, creating compliance risks for an industry heavily dependent on federal research grants. The explicit connection to False Claims Act enforcement means companies face potential treble damages and whistleblower lawsuits, not just grant termination. Unlike general civil rights compliance, this certification makes DEI program compliance a condition material to payment decisions, increasing financial exposure. The DOJ's coordinated enforcement initiative across 93 attorney's offices signals systematic scrutiny of life sciences companies' internal policies, requiring immediate legal review of existing DEI programs to avoid catastrophic FCA liability.
The bottom line
Life sciences companies with NIH funding must review their DEI programs for compliance with evolving federal antidiscrimination law interpretations. Companies should retain counsel to document compliance efforts and prepare for potential employee reports or government investigations, as the new certification transforms routine grant compliance into high-stakes False Claims Act exposure.
FAQs
What types of DEI programs could be considered noncompliant under the new NIH rules?
Any program that allocates benefits or burdens based on race, ethnicity, or national origin could be deemed noncompliant.
How does this certification requirement affect collaborations with international institutions?
Collaborations could be impacted if partner institutions engage in prohibited boycotts or use DEI frameworks considered discriminatory under U.S. law.
Are private companies that subcontract with NIH grant recipients also subject to this certification?
Indirect recipients or subcontractors may not certify directly but could still face scrutiny through flow-down compliance obligations.
How will NIH verify whether an organization’s DEI program violates federal antidiscrimination law?
NIH is likely to rely on audits, whistleblower reports, and DOJ investigations to evaluate compliance.
Can companies modify existing DEI programs to avoid FCA liability, and how quickly should they act?
Yes, companies should immediately review and, if necessary, adjust DEI programs to align with the new requirements.
