Fourth Circuit Unblocks Trump Anti-DEI Orders — With Caveats

U.S. President Donald Trump’s executive orders targeting diversity, equity and inclusion (DEI) programs — primarily within the federal government and for federal contractors, but also with ramifications for all private employers — are OK to proceed, based on the Friday, March 14, ruling by a panel of three federal judges. The unanimous decision unblocks a lower-court injunction on those orders, pending appeal. While siding with Trump, the chief judge and one additional judge shared reservations, caveats and guardrails in the 10-page opinion letter.

The judicial panel on the U.S. Court of Appeals for the Fourth Circuit presided over the case National Association of Diversity Officers in Higher Education, et al. v. Trump, et al. (NADOHE v. Trump), which examined whether the President has the authority to issue a ban on “illegal” mandates, policies, programs, preferences and activities that promote DEI — also referred to by the Trump administration as “diversity, equity, inclusion and accessibility” (DEIA) — within employment practices, contracts, and general business and personnel management.

Trump outlined the ban in two executive orders (EOs):

EO 14151, “Ending Radical and Wasteful Government DEI Programs,” issued Jan. 20
EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued Jan. 21

Additional policy and enforcement details, some directed firmly toward private employers (including a call for Department of Justice investigations on targeted companies), were included in an ancillary memorandum, titled “Ending Illegal DEI and DEIA Discrimination and Preferences,” sent Feb. 5 by U.S. attorney general Pam Bondi.

The latest court decision came after Adam B. Abelson, a judge for the U.S. District Court for the District of Maryland:

Issued a preliminary injunction on Feb. 21 that blocked core parts of the anti-DEI EOs, ruling the Trump administration overstepped Constitutional boundaries and used overly vague terms (in particular, the word “illegal” as it applies to DEI, discrimination, preferences and more) within those orders; and,
Denied on March 3 a legal request by the Trump administration to rescind the injunction, turning down the argument that the “stay” improperly prevented federal agencies from enforcing antidiscrimination laws and derailed “intra-executive policy implementation by enjoining the President’s policy directives to federal agencies.”

While the Fourth Circuit has now weighed in on the matter, several other cases are pending against EOs 14151 and 14173, as well as EO 14168, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” issued Jan. 20. These cases include:

National Urban League, et al. v. Trump, et al. (challenging EOs 14151, 14168 and 14173), U.S. District Court for the District of Columbia
Chicago Women in Trades v. Trump, et al. (challenging 14151 and 14173), U.S. District Court for the Northern District of Illinois
San Francisco AIDS Foundation, et al. v. Trump, et al. (challenging 14151, 14168 and 14173), U.S. District Court for the Northern District of California

These district courts could issue their own injunctions on all or parts of the EOs, so stay tuned.

Salient Commentary in the Latest Ruling

In serving as the lead writer of the March 14 opinion letter, chief judge Albert Diaz stated the government had met its burden to warrant a stay of the Maryland district court’s injunction, but added the words “for now” as a qualifier.

“I’m compelled to … address what seems to be (at least to some) a monster in America’s closet — diversity, equity and inclusion initiatives,” Diaz wrote. “The executive orders charge that DEI … policies include ‘dangerous, demeaning, and immoral race- and sex-based preferences’ that ‘deny, discredit and undermine the traditional American values of hard work, excellence and individual achievement in favor of an unlawful, corrosive and pernicious identity-based spoils system.’ The orders seek to terminate all ‘equity-based’ grants or contracts that apparently have led to ‘immense public waste and shameful discrimination.’ But neither order ever defines DEI or its component terms. And despite the vitriol now being heaped on DEI, people of good faith who work to promote diversity, equity and inclusion deserve praise, not opprobrium. For when this country embraces true diversity, it acknowledges and respects the social identity of its people. When it fosters true equity, it opens opportunities and ensures a level playing field for all. And when its policies are truly inclusive, it creates an environment and culture where everyone is respected and valued. What could be more American than that?”

He added: “Under the most basic tenets of the First Amendment, there should be room for open discussion and principled debate about DEI programs, and whether its corresponding values should guide admissions, hiring, scholarship, funding or workplace and educational practices. And, all Americans should be able to freely consider how to continue empowering historically disadvantaged groups, while not ‘[r]educ[ing]’ the individuals within those groups ‘to an assigned racial [or sex-based] identity.’”

Diaz closed by stating, “As with most monsters in the closet, what lurks is but a mere shadow, for which the remedy is simply light.”

Fellow judge Pamela Harris concurred with Diaz and provided additional perspective.

“The executive orders do not purport to establish the illegality of all efforts to advance diversity, equity or inclusion, and they should not be so understood. Instead, the … [questioned] provisions apply only to conduct that violates existing federal antidiscrimination law,” Harris wrote. “But my vote to grant the stay comes with a caveat. What the orders say on their face and how they are enforced are two different things. Agency enforcement actions that go beyond the orders’ narrow scope may well raise serious First Amendment and Due Process concerns, for the reasons cogently explained by the [Maryland] district court. Finally, my vote should not be understood as agreement with the orders’ attack on efforts to promote diversity, equity and inclusion.”

The third judge on the panel, Allison Rushing, sided with Diaz and Harris regarding procedure, substance and scope aspects of the case, but separated herself from her colleagues by refraining from opinions on the issue of DEI itself.

“We must not lose sight of the boundaries of our Constitutional role and the imperative of judicial impartiality,” Rushing wrote. “Any individual judge’s view on whether certain executive action is good policy is not only irrelevant to fulfilling our duty to adjudicate cases and controversies according to the law, it is an impermissible consideration. A judge’s opinion that DEI programs ‘deserve praise, not opprobrium’ should play absolutely no part in deciding this case.”

In addition, Rushing cited the 2013 decision in the case Clapper v. Amnesty International USA in stating, “Ripeness and standing doctrines ‘prevent the judicial process from being used to usurp the powers of the political branches.’”

Ramifications from the Decision

How should employers and their total rewards professionals respond, given the March 14 appellate court decision?

In a post on its website, the Littler Mendelson law firm mentioned several impacts and considerations:

Federal investigations. “[DEI] programs … will face heightened scrutiny to ensure they do not promote illegal preferences or discrimination.”
Compliance reviews. “Organizations will need to review their [DEI] initiatives under privilege to ensure they align with federal civil rights laws and do not violate the executive orders.”
Training modifications. “Employers may need to adjust or discontinue certain [DEI] training programs to avoid potential legal challenges.”
Communication strategies. “Employers will need to communicate clearly with employees about any changes to [DEI] programs and the reasons behind them.”

Law firm Morrison Foerster added on its website: “One of the most critical items is to inventory and audit existing and proposed DEI programs and policies under attorney-client privilege. This includes reviewing all public-facing DEI communications and disclosures (e.g., SEC filings, websites, recruiting materials and messaging to employees) to ensure that they are vetted appropriately based on the company’s risk tolerances and preferences. At the same time, companies that eliminate DEI programs or excessively curtail them can create legal, business and reputational risks. The outcome of these audits can be used to inform the companies’ DEI strategies moving forward based on risk tolerances and preferences. These audits are even more critical for federal contractors so they can certify the lawfulness of their DEI programs to the government when the new contractual certification requirements are added to their federal contracts.”

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