A federal court has blocked key provisions of the Trump Administration’s executive orders on diversity, equity, and inclusion (DEI). On February 21, 2025, the U.S. District Court for the District of Maryland issued a preliminary injunction preventing the government from:
- Terminating or altering contracts, grants, or obligations because they are equity-related.
- Requiring contractors and grantees to certify the legality or materiality of their DEI practices.
- Pursuing enforcement actions, including False Claims Act (FCA) cases, based on these executive orders.
The ruling applies nationwide to federal contractors and grantees and prevents enforcement of key sections of the January 20 and January 21 executive orders. Specifically, the court enjoined Sections 2(b)(i) and 3(b)(iv) of the J20 Order (Ending Radical and Wasteful Government DEI Programs and Preferencing) and Section 4(b)(iii) of the J21 Order (Ending Illegal Discrimination and Restoring Merit-Based Opportunity).
What Remains in Effect?
The injunction does not impact other provisions of the DEI executive orders, including the prohibition on affirmative action in federal contracting and the revocation of Executive Order 11246 (Equal Employment Opportunity). These changes remain in force, and federal agencies have already begun compliance efforts.
Court’s Reasoning for the Injunction
The Termination Provision
Section 2(b)(i) of the J20 Order requires agencies to terminate all “equity-related” grants and contracts within 60 days, to the extent permitted by law. The court found the term “equity-related” too vague, raising concerns about arbitrary enforcement. Without clear definitions, federal contractors and grantees would be left uncertain about which activities might trigger termination, creating a chilling effect on DEI-related initiatives.
The Certification Provision
Section 3(b)(iv) of the J20 Order mandates that federal contracts and grants include clauses requiring contractors and grantees to:
- Agree that compliance with federal anti-discrimination laws is material to government payment decisions under the FCA.
- Certify that they do not operate DEI programs that violate federal anti-discrimination laws.
The court determined that this provision improperly leveraged federal funding to regulate speech beyond the scope of funded programs, violating the First Amendment. The language suggested an intent to pressure federal contractors and grantees to abandon DEI programs under the threat of perjury or FCA liability.
The Enforcement Threat Provision
Section 4(b) of the J21 Order directs the Attorney General to investigate DEI initiatives and prepare reports on compliance. Section 4(b)(iii) goes further, instructing the Attorney General to outline specific steps to deter DEI programs or principles that may involve illegal discrimination or preferences.
The court struck down this provision as an unconstitutional content-based and viewpoint-based restriction on speech. The ruling emphasized that the government cannot use the threat of legal sanctions to suppress disfavored speech, a principle upheld by the Supreme Court. However, the injunction does not prevent the Attorney General from conducting investigations or reporting on DEI-related enforcement—only from taking direct enforcement action under this provision.
What’s Next?
The Trump Administration has already appealed the preliminary injunction to the Fourth Circuit Court of Appeals. If upheld, the case could ultimately reach the Supreme Court, given the constitutional issues at stake.
For now, the injunction prevents enforcement of these key provisions, but contractors and grantees should remain cautious. The Administration may attempt to clarify terms like “equity-related” in future mandates, but its broader policy direction is unlikely to shift.
Organizations facing contract terminations should continue preparing for that outcome though delayed. Those entering new agreements should carefully review DEI-related clauses and seek legal counsel before agreeing to such restrictions or certifications.
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