On February 21, 2025, a federal judge issued a nationwide preliminary injunction that partially prevents the Trump administration from enforcing its executive orders on diversity, equity and inclusion (“DEI”). At issue were (1) the executive order issued on January 20, 2025 (the “J20 Order”) that directs federal agencies to terminate “equity-related” grants or contracts, and (2) as we discussed previously, the executive order issued on January 21, 2025 (the “J21 Order,” and together with the J20 Order, the “Executive Orders”), that, among other things, requires federal contractors and grantees to certify compliance with “any applicable Federal anti-discrimination laws” and directs the U.S. Attorney General to develop a plan to encourage the private sector to “end illegal discrimination and preferences, including DEI.”
Friday’s injunction, issued by Biden-appointed judge Adam B. Abelson, prohibits federal agencies from: (1) pausing, freezing, impeding, blocking, canceling, or terminating any awards, contracts, or obligations, or changing the terms thereof pursuant to the terms of the J20 Order; (2) requiring any grantee or contractor to make any “certification” or other representation pursuant to the requirements of the J21 Order; or (3) bringing any False Claims Act enforcement action, or other enforcement action, pursuant to the enforcement threat terms of the J21 Order. Of note, Judge Abelson denied the request to enjoin the part of the J21 Order that instructs the U.S. Attorney General to submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing Federal civil rights laws, or engaging in investigation.
The Executive Orders drew allegations from some civil rights groups, business associations, and educational institutions that the Executive Orders violated the First Amendment, the Equal Protection Clause, and the Administrative Procedure Act, and that the Executive Orders interfered with their efforts to foster a diverse and inclusive workplace and learning environment. Opponents of the Executive Orders cited concerns that DEI-related practices employed by government contractors and private enterprises alike that have become commonplace and generally have been considered lawful activities, might now be targeted by federal agencies as unlawful. Furthermore, critics argued the vagueness of the Executive Orders renders them difficult to comply with absent more clarification as to what constitutes “illegal DEI.” Several of these groups, including the City of Baltimore and higher education groups, filed a lawsuit challenging the Executive Orders earlier this month. The injunction comes just days after civil rights organizations filed similar challenges in the U.S. District Court for the District of Columbia.
Since the issuance of the Executive Orders, both federal contractors and private employers have been considering the question as to what DEI practices might actually be “unlawful” in the eyes of the Trump administration. For example, the Executive Orders do not define terms such as “DEI,” “equity-related,” “promoting DEI,” “illegal DEI,” “illegal DEI and DEIA policies,” or “illegal discrimination or preferences,” nor do they identify the types of programs or policies the administration considers “illegal.” Reportedly, when pressed during the injunction hearing, the lawyer for the Department of Justice declined to provide specificity as to whether certain DEI practices — such as whether conducting information sessions at historically black colleges and universities to recruit prospective job candidates — could subject federal contractors to liability under the Executive Orders.
Judge Abelson agreed with the plaintiffs, finding that they not only were likely to succeed on the merits of their claims, but also that they would suffer irreparable harm without an injunction. The judge concluded that the Executive Orders are unconstitutionally vague to the point of chilling protected speech, noting “Plaintiffs, their members, and other federal contractors and grantees have shown they are unable to know which of their DEI programs (if any) violate federal anti-discrimination laws, and are highly likely to chill their own speech — to self-censor, and reasonably so — because of the Certification Provision.” In determining the certification provision in the J21 Order operates as (1) a content-based prior restraint on speech and (2) a viewpoint-based restriction in violation of the First Amendment, by seeking to “punish and, apparently, attempt to extinguish” support for DEI programs in the private sector, Judge Abelson remarked that “even the government does not know what constitutes DEI-related speech that violates federal anti-discrimination laws. . . .”
The injunction provides at least a temporary reprieve, unless and until the injunction is reversed or modified by a higher court, for federal contractors and grant recipients who have been uncertain about how to comply with the certification requirements of the J21 Order or whether to continue or resume their DEI programs. However, the legal status of the Executive Orders remain subject to further litigation, and federal contractors and grant recipients may also still be impacted by the parts of the Executive Orders that remain enforceable. For example, Judge Abelson noted that there are aspects of the Executive Orders that were not challenged, including the J21 Order’s directive to the Director of the Office of Management and Budget to “[e]xcise references to DEI and DEIA principles” from federal acquisition and contracting procedures. Therefore, federal contractors and grant recipients should continue to monitor the developments in this area and consult with legal counsel before making any significant changes to their DEI policies and practices.
Likewise, although much of the ruling addresses federal contractors and grant recipients, it also has broader implications for companies (both public and private) that are not government contractors. Judge Abelson specifically noted that, by threatening the private sector with enforcement actions based on vague, undefined standards, the enforcement threat aspects of the J21 Order were facially unconstitutional under the due process clause of the Fifth Amendment. As noted above, the injunction did not extend to the directive that the U.S. Attorney General identify a plan of specific steps or measures to deter DEI programs or principles that constitute illegal discrimination or preferences. But, with the vagueness analysis, the injunction restricts actual enforcement actions by federal agencies to the extent they fall within the “Enforcement Threat Provision” as defined in the order.
It is widely anticipated that the Department of Justice will appeal the injunction order to the U.S. Court of Appeals for the Fourth Circuit. Furthermore, employers should keep in mind that the injunction does not impact any claims of wrongful DEI efforts by entities in the private sector that may be asserted by state attorneys general, private litigants and/or non-judicial attacks on corporate DEI initiatives, such as through social media campaigns, boycotts or similar means. Companies should stay informed about any new regulations, legal challenges and socio-political trends that could impact their DEI initiatives as well as any reputational considerations that could be implicated by various sides of this highly polarized topic.
