Court Blocks Enforcement of Anti-DEI Executive Orders

What, exactly, is “illegal” Diversity, Equity and Inclusion (“DEI”)? As we previously reported, two recent Executive Orders (“EO”) prohibit “illegal” DEI practices that violate longstanding civil rights laws, but fail to define precisely what conduct—potentially including protected free speech—they address. For this and other reasons, a Maryland federal district court recently granted a preliminary injunction barring the Trump administration from enforcing most provisions of the anti-DEI EOs. 

Key Takeaways for Government Contractors

• The Trump administration is currently enjoined from enforcing most parts of the anti-DEI orders. It cannot cancel grants or contracts, require DEI-related certifications or bring enforcement actions rooted in the anti-DEI EOs.
• The EOs were not enjoined in all respects. The government may still prepare a report identifying alleged DEI offenders, and may also investigate perceived DEI civil rights violations.
• False Claims Act risk remains even while the injunction is in place. Most contracts contain a clause (FAR 52.222-26) prohibiting contractors from discriminating based on race. Even without the express materiality provision in the EO, plaintiffs may argue the government “has signaled [a] change in position” by indicating that compliance with discrimination laws may be material to payment. See Universal Health Services, Inc. v. United States. ex rel. Escobar, 579 U.S. 176, 195 (2016). The government, however, has instructed contracting officers not to include certain equal opportunity clauses, including FAR 52.222-26, in future solicitations and to notify contractors that the government will not be enforcing compliance with these provisions in existing contracts, making FCA claims premised on these contract clauses more challenging.

The law may change, quickly. On February 24, 2025, the Trump administration filed a notice of appeal, and this issue could potentially even reach the U.S. Supreme Court. 

The Case

Currently, National Association of Diversity Officers in Higher Education, et al. v. Trump is pending before Judge Adam B. Abelson in the District of Maryland. The plaintiffs include the city of Baltimore and membership associations representing educators and restaurant workers. The plaintiffs sought injunctive relief, arguing that the EOs are unconstitutionally vague and restrict free speech.  Recently, civil rights organizations filed similar lawsuits in the District of Columbia, the Eastern District of Virginia, the Northern District of California and the Northern District of Illinois.[1]

The Hearing

On February 19, 2025, Judge Abelson held a hearing on the plaintiffs’ motion for a preliminary injunction that foreshadowed his subsequent ruling when the Department of Justice (“DOJ”) could not provide clarification about the meaning of “illegal” DEI. For example, Judge Abelson asked, “Let’s say for example the Department of Education funds computers in elementary schools. Would it constitute illegal DEI for teachers to use one of those computers to teach about Jim Crow?” DOJ attorney Pardis Gheibi replied “I can’t answer that question.”

Judge Abelson further asked whether discussing inclusive leadership, diversity and cultural sensitivity is “suddenly” illegal. Gheibi said that she could not answer that question, either. Judge Abelson replied “[t]hat is what your boss, the attorney general, said.” He noted that Attorney General Pam Bondi’s memo regarding the EOs instructed the DOJ’s Civil Rights Division to “investigate, eliminate, and penalize illegal DEI” efforts such as “preferences, mandates, policies, programs, and activities” in the private sector and at educational institutions that receive federal funds.

The Order

Two days after the hearing, the Court granted, in large part, the plaintiffs’ request for a preliminary injunction, holding that the plaintiffs would likely succeed on their claims that the EOs violated constitutional free speech rights and due process protections. The Court tethered its reasoning to the questions that the DOJ failed to answer earlier in the week, noting that “the government refused to even attempt to clarify” what constitutes illegal DEI “or whether these hypothetical scenarios [regarding implementation of DEI] are legal.” It noted that the EOs leave "the private sector at a loss for whether the administration will deem a particular policy, program, discussion, announcement etc., to be among the 'preferences, mandates, policies, programs and activities' the administration now deems 'illegal.'"  It said that neither EO “gives guidance on what the new administration considers to constitute ‘illegal DEI discrimination and preferences,’ or ‘[p]romoting ‘diversity.’’ Consequently, “[b]ecause even the government does not know what constitutes DEI-related speech that violates federal anti-discrimination laws, Plaintiffs have easily shown a likelihood that they will prevail…” In addition, the Court concluded that one of the EOs constitutes “viewpoint” discrimination, meaning it "squarely, unconstitutionally" infringes on the freedom of speech.

The preliminary injunction applies nationwide to the named plaintiffs and all similarly situated parties, and bars three specific categories of government activity.

First, the Court blocked an EO provision directing federal agencies to “terminate... all... ‘equity-related' grants or contracts” within 60 days, reasoning that this provision is unconstitutionally vague under the Fifth Amendment’s Due Process Clause, and that the EO failed to give fair notice of what constitutes an “equity-related” grant or contract.  This, according to the Court, could lead to arbitrary or discriminatory enforcement by agency officials, and leaves individuals and organizations with no way to know how to bring their grants and contracts into compliance.

Second, the Court blocked the provision requiring federal contractors and grant recipients to certify that they (1) agree that compliance “with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” for False Claims Act purposes, and (2) do “not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” The Court held that these requirements probably violate the First Amendment because they restrict free speech about DEI, emphasizing that the certifications reach past federally funded activities and implicate all of a contractor’s or grantee’s operations. The Court further noted that the government’s refusal to clarify what DEI initiatives are illegal heightens the “speech-chilling effect” of the certification and “was likely designed to induce . . . federal contractors and grantees to apply an over inclusive definition of illegal DEI to avoid risking liability.”

Third, the Court partially enjoined the EO provision directing federal agencies to end “illegal discrimination and preferences, including DEI” in the private sector and to develop a plan to “deter DEI programs or principles” through civil investigations. The injunction blocks the government from bringing enforcement actions against private sector organizations based on this provision, which likely violates both the First Amendment (as an unconstitutional viewpoint-based restriction) and the Fifth Amendment (due to vagueness about what constitutes “illegal DEI.”) The Court noted that the threat of enforcement actions applies only to DEI programs and does not include “anti-DEI principles that may also be in violation of existing federal anti-discrimination laws.” The Court found “[t]hat is textbook viewpoint-based discrimination.” And, because the EOs contain “vague, undefined standards” of what conduct is prohibited, the Court held the directive to bring enforcement actions “is facially unconstitutional” under the due process clause of the Fifth Amendment.

The Court’s injunction did not block the anti-DEI EOs across the board. The Attorney General may still prepare an enforcement report regarding DEI activity, and the government may investigate companies’ DEI policies and practices. This is something the DOJ is already doing. At the February 19 hearing, the DOJ said that said Attorney General Bondi is currently determining the government’s “enforcement strategy,” and the specific DEI-related programs that violate federal anti-discrimination laws, as required by the EOs.

In the meantime, we suggest working with your Dinsmore attorney to minimize risks and stay updated on the latest developments.