March 17, 2025 Update. On March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit granted a stay of the preliminary injunction pending the government’s appeal.
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On February 21, 2025, the U.S. District Court for the District of Maryland issued a preliminary injunction enjoining the federal government from implementing certain provisions of President Trump’s January 20 and January 21 Executive Orders related to diversity, equity, inclusion, and accessibility (“DEI” or “DEIA”), finding those provisions are unconstitutionally vague and infringe upon free speech. Specifically, the court blocked: (i) the termination of “equity-related” grants or contracts with the federal government; (ii) requirements that federal contractors certify that their compliance with federal anti-discrimination laws is material for purposes of the False Claims Act, and that they do not operate “any programs promoting DEI”; and (iii) any enforcement actions based on President Trump’s instruction to the Attorney General to create a “strategic enforcement plan” with “specific steps or measures to deter DEI programs or principles … that constitute illegal discrimination or preferences.” Significantly, the court did not enjoin the Attorney General from preparing a “strategic enforcement plan,” or engaging in investigations of DEI practices.
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In National Association of Diversity Officers in Higher Education v. Trump, a group of plaintiffs including 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, challenged three provisions of President Trump’s January 20 and January 21 DEI-Related Executive Orders, which we previously discussed here. The challenged provisions include:
- The “Termination Provision,” which requires all federal agencies to “terminate … ‘equity-related’ grants or contracts.”
- The “Certification Provision,” which requires all federal grants and contracts to include terms requiring that the contractor or grantee (i) “agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of [the False Claims Act];” and (ii) “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
- The “Enforcement Threat Provision,” which requires the Attorney General to issue a report “containing recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI” and which “shall contain a proposed strategic enforcement plan” that will identify “specific steps or measures to deter DEI programs or principles … that constitute illegal discrimination or preferences.” The plan will also include the identification by each federal agency of “up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.”
The court held that the plaintiffs are likely to be able to prove that the Termination Provision and Certification Provision are “unconstitutionally vague on their face,” in violation of the Due Process Clause of the Fifth Amendment, because the Executive Orders “do not define any of the operative terms, such as ‘DEI,’ ‘equity-related,’ ‘promoting DEI,’ ‘illegal DEI,’ ‘illegal DEI and DEIA policies,’ or ‘illegal discrimination or preferences,’—let alone identify the types of programs or policies the administration considers ‘illegal’” such that contractors and grantees will have “no idea whether the administration will deem their contractors or grants, or work they are doing, or speech they are engaged in, to be ‘equity related.’” The court also held that the Enforcement Threat Provision is likely to be unconstitutionally vague under the Fifth Amendment Due Process Clause because it threatens the entire “‘private sector’ with enforcement actions based on … vague, undefined standards.”
The court also found that the plaintiffs are likely to be able to prove that the Certification Provision and Enforcement Threat Provision unconstitutionally abridge free speech in violation of the First Amendment. The court wrote that the Certification Provision “on its face … constitutes a content-based restriction on the speech rights of federal contractors and grantees, and … expands to all of those contractors’ and grantees work, whether funded by the government or not” such that the “clear purpose, and clear effect, of the Certification Provision is to restrict speech related to topics such as equity, inclusion, and diversity that also falls outside the scope of the federal funding.” With respect to the Enforcement Threat Provision, the court wrote that it likely “violates the First Amendment, because it threatens to initiate enforcement actions against Plaintiffs (in the form of civil compliance investigations) for engaging in protected speech,” including because it “expressly focuses on ‘deter[ring] DEI programs or principles that constitute illegal discrimination or preferences’ and ‘encourag[ing] the private sector to end illegal discrimination and preferences, including DEI,’ without, for example, a similar restriction on anti-DEI principles that may also be in violation of existing federal anti-discrimination laws.”
Accordingly, the court found that “Plaintiffs have shown they are entitled to [a nationwide] injunction as to the Termination, Certification and Enforcement Threat Provisions, whether as applied to Plaintiffs or to others.” The court declined, however, to “enjoin the Attorney General from preparing the report pursuant to the [January 21 Executive] Order or engaging in investigation” for “prudential and separation-of-powers reasons.”
Employers should continue to closely monitor the changing political and legal landscape in this area and be mindful that this decision does not block the federal government from continuing to investigate DEI practices. The government is expected to appeal this decision, which comes shortly after civil rights organizations filed challenges to the DEI-related Executive Orders in the U.S. District Court for the District of Columbia and the U.S. District Court for the Northern District of California.
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Find more Blog posts about litigation and regulatory developments that affect the workplace here.
View other S&C insights relating to President Trump’s recent executive orders.