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BREAKING NEWS: On March 14, the United States Court of Appeals for the Fourth Circuit reversed the nationwide injunction that blocked key portions of President Donald Trump's January 2025 Executive Orders (EOs) focused on DEI programs. Even though the appeal is currently pending, however, federal agencies can continue legal enforcement against contractors who operate DEI programs that, according to the EOs, violate federal anti-discrimination laws.
On February 21, a federal district court judge leveled a preliminary injunction against elements of the Trump Administration’s DEI executive orders. Overall, the nationwide injunction prevents the federal government from requiring federal contractors and grantees to perform specific actions. These actions include certifying that they do not operate DEI programs that violate federal anti-discrimination laws. Earlier this year, President Donald Trump signed Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO). Generally, the EO aims to end illegal diversity, equity, and inclusion (DEI) programs.
Overview of the DEI Executive Orders Ruling
According to Seyfarth Shaw LLP, the U.S. District Court for the District of Maryland (Court) issued the ruling. Altogether, the suit challenged different parts of the following EOs signed in January:
- 14151 - Ending Radical and Wasteful Government DEI Programs
- 14173 - Ending Illegal Discrimination and Restoring Merit-Based Opportunity
The plaintiffs in the lawsuit included:
- the National Association of Diversity Officers in Higher Education,
- the American Association of University Professors,
- Restaurant Opportunities Centers United, and
- the mayor and city council of Baltimore, Maryland.
In general, the plaintiffs in the suit tried to get the Court to find three provisions of the two executive orders unconstitutional. According to Littler, the judge found that the plaintiffs were likely to prevail in their challenges to these provisions. Specifically, the Court could see where the provisions violate First Amendment rights to free speech and could also violate the Fifth Amendment.
Enjoined Provisions of the DEI Executive Orders
Accordingly, the Court’s ruling currently enjoins the enforcement of only three specific provisions of the EOs. (This means that the rest of the rules included within the EOS remain intact.)
- The Court blocked EO 14151’s “Termination Provision.” This provision directed federal agencies to end all “equity-related” grants or contracts by mid-March 2025. In short, the Court found this instruction unconstitutionally vague under the Fifth Amendment’s Due Process Clause. The ruling states that the EO “failed to provide fair notice of what constitutes an ‘equity-related’ grant or contract...” The Court's decision also states that the lack of explanation “invites arbitrary enforcement by agency officials who must make subjective determinations about which grants have sufficient connection to ‘equity’ to warrant termination.”
- The Court enjoined EO 14173’s “Certification Provision.” Previously, the provision required two certifications in every federal contract and grant award. Those certifications include:
- that the contractor or grantee agrees that “its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions,” and
- that the contractor or grantee certifies that “it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
In summary, the Court believes that these requirements violate the First Amendment. The violation occurs mainly because content-based restrictions target protected speech about diversity, equity, and inclusion.
- Also included in EO 14173, the Court partially blocked an “Enforcement Threat Provision.” This provision directed “all federal agencies, with the Attorney General's assistance” to take “appropriate measures” to end “illegal discrimination and preferences, including DEI” in the private sector. Additionally, the provision requires agencies to develop a plan to “deter DEI programs or principles” through investigations of major organizations. In the final analysis, the Court believes this violates the First and Fifth Amendments as it targets free speech regarding DEI and is vague about the definition of “illegal DEI.” The Attorney General, however, can still conduct investigations, just not against private sector organizations.
Finally, the Trump Administration will likely file an appeal to this ruling with the appropriate circuit court. The case may also eventually end up in front of the U.S. Supreme Court. Until that time, however, affected employers must follow the executive orders signed into law in January, minus the enjoined provisions listed above.
Employer Takeaways
In conclusion, although the DEI executive orders being examined focus on federal contractors, all employers must know their implications. When the EOs were first signed in January, they did not change any current law relating to employment discrimination. Instead, they focused on increased investigation and enforcement of what the government considers “illegal” DEI programs. Now that the definition of “illegal DEI” is being scrutinized, all employers should review their policies to verify compliance with Title VII of the Civil Rights Act (Title VII). Title VII is the federal law that prohibits employment discrimination based on race, color, religion, sex, or national origin.
To assist employers in training workers on forms of harassment and discrimination that could occur in the workplace, WorkWise Compliance created the Harassment & Discrimination Prevention Training eLearning Module for Employees. In addition to explaining harassment and discrimination, the training module describes preventing such actions and addresses ways to report complaints. For employers in California and New York, the following harassment and discrimination prevention trainings need to be utilized where appropriate:
- California Sexual Harassment Training eLearning Program
- New York State Sexual Harassment Training eLearning Program
