Key parts of President Donald Trump’s executive orders (EOs) seeking to dismantle diversity, equity and inclusion (DEI) programs in the public and private sector were enjoined nationwide on Feb. 21 by a federal district court in Maryland. The injunction is a significant development with immediate consequences for employers throughout the country.
Provisions Enjoined
The preliminary injunction bars the named federal defendants from:
- Pausing, freezing or terminating existing “equity-related” federal contracts or grants
- Requiring federal contractors or grant recipients to certify that they do “not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws”
- Bringing False Claims Act enforcement actions or other enforcement actions targeting employers’ “DEI programs or principles”
The named defendants include the Office of Management and Budget, the Departments of Health and Human Services, Education, Labor, Justice, Energy, Transportation, Commerce, Agriculture and Interior, and the National Science Foundation.
The government has already filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit and a motion to stay the injunction pending the appeal. At the time this alert is posted, the injunction remains in effect.
The Executive Orders Involved
The preliminary injunction puts on ice parts of two EOs. The first, EO 14151, titled “Ending Radical and Wasteful Government DEI Programs and Preferencing”, was signed on Jan. 20, 2025. It characterizes DEI efforts as “illegal and immoral discrimination programs” and states as the purpose of the order the “termination” of all DEI and “diversity, equity, inclusion, and accessibility (DEIA) policies, programs, and activities” in the federal government and the private sector.
The Jan. 20 EO includes the directive that, within 60 days of the President’s signing, federal agencies, departments, and commission heads “terminate, to the maximum extent allowed by law, all … ‘equity-related’ grants or contracts.” (The “Termination Provision.”)
The second, EO 14173 titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” was signed on Jan, 21 and mandates that the head of each federal agency “include in every contract or grant award” a provision requiring that the other party to the contract or the grant recipient “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” (The “Certification Provision.”)
The Jan. 21 EO further directs the U.S. Attorney General to submit to the White House recommended “measures to encourage the private sector to end illegal discrimination and preferences, including DEI” programs, along with a “strategic enforcement plan that must include a list of potential civil compliance investigations” of private sector employers that will “deter” them from using “DEI programs or principles” the administration views as “illegal discrimination.” (The “Enforcement Threat Provision.”)
Court’s Analysis of the Termination Provision
In his injunction decision, U.S. District Judge Adam B. Abelson reviewed the Termination Provision under the due process clause of the Fifth Amendment to the U.S. Constitution which guarantees that, “[n]o person shall be . . . deprived of life, liberty, or property without due process of law.” Citing longstanding Supreme Court precedents, Judge Abelson observed that due process consists of at least two fundamental aspects: first, that parties know what the law requires of them so they may comply; and, second, that the law provide clear guidance so that those enforcing the law “do not act in an arbitrary or discriminatory way.”
The decision notes with palpable concern that the Jan. 20 EO does not define “equity,” “equity-related” grants or contracts, “DEI,” “DEIA,” “policies, programs, or activities” that utilize “DEI or DEIA,” or other key terms. As a consequence of what Judge Abelson characterized as a resulting “lack of clarity” in the Termination Provision, his decision found it “unavoidable that agency decisionmakers” will shape the Termination Provision “through their enforcement decisions” inviting “arbitrary and discriminatory enforcement over billions of dollars in government funding” of contracts and grants.
Judge Abelson concluded that the plaintiffs are likely to succeed in proving the Termination Provision is unconstitutionally vague on its face in violation of the due process clause.
The lawsuit also challenges the Termination Provision on the grounds it allegedly violates the Spending Clause of the U.S. Constitution. The Spending Clause, in brief, vests in Congress the authority to tax and make spending decisions. Judge Abelson did not consider the Spending Clause argument in issuing the preliminary injunction although the claim remains a part of the lawsuit.
Court’s Analysis of the Certification Provision
Judge Abelson reviewed the Certification Provision as a potentially impermissible restriction on the First Amendment free speech rights of federal contractors and grant recipients. His decision found the plaintiffs likely to prevail in proving the Certification Provision constitutes an unconstitutional content-based restriction on speech: “the clear purpose, and clear effect, of the Certification Provision is to restrict speech related to topics such as equity, inclusion, and diversity,” Judge Abelson wrote.
The decision found fault with the Certification Provision in a second respect, as well, namely, that it would chill contractors and grantees’ speech not only within their performance of federal contracts or grants, but in their conduct wholly outside of their performance of such functions. Judge Abelson found that by requiring federal contractors and grantees to certify that they do not operate “any” programs promoting DEI, the Certification Provision restricts speech throughout “all of those contractors’ and grantees work, whether funded by the government or not.” In this respect, the decision found the scope of the Certification Provision to be an excessive restriction on First Amendment rights of even federal contractors and grantees, whose free speech rights may, in some circumstances, be limited as a condition of their accepting federal funds.
Although the government may “choose to fund one activity to the exclusion of another,” “it may not punish government contractors or grantees because of their speech on matters of public concern,” Judge Abelson wrote, quoting again U.S. Supreme Court precedent.
The lawsuit challenges the Certification Provision on separation of powers grounds, as well. The district court found it unnecessary to consider the separation of powers argument in deciding the preliminary injunction motion. The separation of powers argument remains a part of the lawsuit going forward.
Court’s Analysis of the Enforcement Threat Provision
Finally, Judge Abelson enjoined the Enforcement Threat Provision on the grounds that plaintiffs had shown they were likely to prevail in demonstrating that it violated both Fifth Amendment due process rights and First Amendment free speech rights. With respect to free speech rights, the Enforcement Threat Provision “expressly targets, and threatens, the expression of views supportive of equity, diversity and exclusion” “without, for example, a similar restriction on anti-DEI principles … That is textbook viewpoint-based discrimination” in violation of First Amendment rights, Judge Abelson wrote.
With respect to the due process challenge, Judge Abelson found it significant that the Executive Orders do not give guidance as to what the administration considers to be “illegal DEI discrimination and preferences” or what the orders encompass by the terms “DEI” or “DEI programs or principles,” for example, making the Enforcement Threat Provision unconstitutionally vague on its face.
“Vague laws invite arbitrary power,” Judge Abelson wrote, quoting U.S. Supreme Court Justice Neil Gorsuch.
Judge Abelson concluded that by broadly “threatening the ‘private sector’ with enforcement actions based on those vague, undefined standards, the Enforcement Threat Provision is facially unconstitutional under the due process clause of the Fifth Amendment.”
Key Takeaways
Notably, the U.S. Equal Opportunity Commission is not a defendant in the case and is not subject to the preliminary injunction.
The provisions enjoined by the district court are some of the most consequential parts of the two EOs. That said, important provisions remain in effect. For example, the Jan. 21 EO directs the Attorney General to submit to the White House no later than May 21, 2025, her “proposed strategic enforcement plan” to include “potential civil compliance investigations” to deter publicly traded corporations, large nonprofits, institutions of higher education with large endowments, and state and local bar associations and medical associations from using “DEI programs or principles” the administration views as “illegal discrimination.” That provision is not enjoined by the pending injunction. As another example, the Jan. 21 EO rescinded executive orders issued from 1965 through 2016 addressing issues of equal opportunity, diversity, and inclusion and those measures remain rescinded.
While the district court’s analysis and issuance of the preliminary injunction are a significant reprieve for the business community and federal grantees, much is left to be seen. For example, if the preliminary injunction is not stayed during the defendants’ appeal to the Fourth Circuit Court of Appeals, defendants may well seek an emergency stay from the U.S. Supreme Court. What the Fourth Circuit and ultimately the Supreme Court do with the injunction substantively also remains to be seen.
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