Two dozen employees could be losing their jobs because of a ruling by a federal judge.

"We thought we were doing so well. Just in a blink of an eye, it's gone," Wanda Duboise, a worker at Phoenix, said.

Phoenix is a non-profit company off Johnson Road that's been hiring people with disabilities for 40 years. The company has been making burial flags for U.S. veterans for 25 years. However, the work contract has been terminated. Now, veteran-owned companies get priority over companies like Phoenix.

"Oh no, now what do we do?" Duboise said.

Uncertainty and a foggy future fills Wanda Duboise's mind after being told she is at risk of losing her job.

"It's my livelihood. It's my source of income. It's a good company to work for," Duboise said.

Duboise is one of 25 Phoenix workers who carefully lays, stitches and folds burial flags for veterans, but the sewing machines may be turned off sooner rather than later.

"We received a letter terminating that contract for priority of the V.A. Rule of Two," Wes Tyler, Vice President of Phoenix, said

The Department of Veteran Affairs is implementing a federal court decision surrounding what is called the Rule of Two, which is part of the "Veterans First Contracting Program."

A federal judge denied a re-hearing on the Rule of Two last month.

"The Rule of Two states, if there are two or more veteran-owned companies, they receive priority over AbilityOne," Tyler said.

Phoenix is AbilityOne, a company providing jobs to people with significant disabilities.

The flag production contract ends July 31st. Tyler tells WAAY 31 he hopes to keep some of the workers whose jobs are on the line, but can't keep everyone. Duboise says it's destroying a family.

"We spend more time together, even though we are getting a job done, than we do with our own families," Duboise said.

Phoenix has assembled more than 2 million flags while under contract, but when the last piece of red, white and blue goes into a box, that's when Duboise says she will have to accept the situation.

"Once we pack the last flag, and we don't have material back here, then that's probably when reality is going to hit," Duboise said.

Phoenix employs more than 800 people. The majority have a significant disability. The company is reaching out to state leaders for help.