On February 21, 2025, the U.S. District Court for the District of Maryland preliminarily enjoined certain aspects of Executive Order No. 14173, President Donald Trump’s “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” executive order (Anti-DEI EO). The executive order eliminated affirmative action requirements for federal contractors and otherwise sought to root out diversity, equity and inclusion (DEI) in the private sector (for a fuller recap, see our client alert). Since the Anti-DEI EO was issued, federal contractors and private sector employers have been carefully evaluating its impact, including in the face of court challenges pending in multiple jurisdictions. The injunction further complicates this analysis, including because an appeal is expected. In the meantime, however, we examine the injunction order and its impact.
Injunction Issued by the US District Court for the District of Maryland
In National Association of Diversity Officers in Higher Education, et al. v. Trump, the plaintiffs successfully challenged two aspects of the Anti-DEI EO:
- The certification provision requiring future government contracts to include a term stipulating that compliance with all applicable federal anti-discrimination laws is material to government payment decisions for purposes of the False Claims Act and requiring federal contractors to certify that they do not operate any programs promoting DEI that violate any applicable federal anti-discrimination laws (the Certification Provision); and
- The enforcement threat provision requiring the attorney general, together with the heads of federal agencies, to submit a report containing recommendations for enforcing civil rights laws and taking other appropriate measures to encourage the private sector to end DEI practices, to deter such programs or principles, and to identify up to nine potential civil compliance investigations (the Enforcement Threat Provision).
The court found both provisions likely violate the Free Speech Clause of the First Amendment. It also found the Enforcement Threat Provision unconstitutionally vague in violation of the Fifth Amendment.[1]
Starting with the free speech challenge, the court found the Enforcement Threat Provision an impermissible content- and viewpoint-based discriminatory restriction on protected speech. As evidence, the court pointed to a separately issued White House fact sheet as well as enforcement actions taken by various agencies, including Department of Justice (DOJ) memoranda[2] and a letter from the Federal Communications Commission.[3] The court noted that though federal contractors are subject to more limited First Amendment protection than private sector employers, they are still protected by the First Amendment in two important ways: (a) the First Amendment prohibits the government from seeking to leverage funding to regulate speech outside of the contours of the program itself,[4] and (b) the government may not terminate contracts because of the contractors’ speech on matters of public concern.[5]
As to the Enforcement Threat Provision, the court found it impermissibly vague because the Anti-DEI EO provides no guidance on what is considered “illegal DEI discrimination preferences,” “[p]romoting ‘diversity,’” “illegal DEI and DEIA policies” or what types of “DEI programs or principles” the new administration considers “illegal” and is seeking to “deter.” (These are issues we had flagged previously for employers.) The court expressed due process concerns because impacted parties may not know what is required of them. Relatedly, clear guidance ensures that those enforcing the law do not act in an arbitrary or discriminatory way. The court expressed particular concern with the vagueness of the Anti-DEI EO in light of its threat to inhibit the exercise of constitutionally protected rights through imposition of False Claims Act liability.
Because of these issues, the court issued a nationwide injunction. The court did not, however, enjoin the attorney general from preparing the report required by Section 4 of Executive Order No. 14173, which requires her, by May 21, 2025, to report to the assistant to the president for domestic policy her recommendations for “enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discriminations and preferences, including DEI.” Nor did the court otherwise enjoin the federal government from investigating what it believes are unlawful employment practices.
What This Means for Employers
All employers still should be mindful of Title VII enforcement. Nothing in the injunction prohibits the government from prosecuting companies that promote what the government believes to be unlawful DEI. For federal contractors, though the court enjoined the Certification Provision, the government may still insert language into government contracts requiring they abide by the anti-discrimination provision of Title VII.
The administration filed a notice of appeal on February 24, 2025. We will continue to monitor closely.
In the meantime, employers should continue to:
- Review policies, procedures and race/sex conscious diversity-related programs for compliance.
- Re-evaluate any voluntary affirmative action plans.
- Train for compliance and be aware of conflicting state requirements.
[1] The plaintiffs also challenged the Certification Provision on a separation-of-powers claim, alleging it violated the Constitution’s spending clause. Because the court held the Certification Provision impermissibly infringed on First Amendment grounds, it did not decide the separation of powers issue.
[2] DOJ, Memorandum from the Attorney General, Ending Illegal DEI and DEIA Discrimination and Preferences (Feb. 5, 2025) https://www.justice.gov/ag/media/1388501/dl?inline; DOJ, Memorandum from the Attorney General, Eliminating Internal Discriminatory Practices (Feb. 5, 2025) https://www.justice.gov/ag/media/1388556/dl?inline_.
[3] FCC Letter to Comcast, “Comcast and NBCUniversal’s Promotion of DEI” (Feb. 11, 2025) https://www.fcc.gov/sites/default/files/Chairman-Carr-Letter%20to-Comcast-02112025.pdf.
[4] Citing Agency for Int’l Dev. V. All. For Open Soc’y Int’l, Inc., 570 U.S. 205, 214-15 (2013).
[5] Citing Board of Cnty. Com’rs, Wabaunsee County, 518 U.S. 668 (1996).
