Judge Blocks Trump’s DEI Orders; What Does This Mean for Employers?

On Friday, Feb. 21, a U.S. federal judge issued a preliminary injunction that blocked significant portions of two executive orders (EOs) issued by President Donald Trump that target “diversity, equity and inclusion” (DEI) — or as the administration referred to it in its EOs, “diversity, equity, inclusion and accessibility” (DEIA).

The decision in the case National Association of Diversity Officers in Higher Education, et al. v. Trump ( NADOHE v. Trump) was appealed by the Trump administration on Monday, Feb. 24. At the moment and at a bare minimum, though, the ruling creates even more uncertainty for employers (government and private sector) with functions, programs and/or initiatives that fall under the very broad umbrella of DEI (or generally promote equitable and diverse workplaces).

Judge Adam B. Abelson, who presided over the case in the U.S. District Court for the District of Maryland, based his ruling primarily on Constitutional oversteps and the vagueness of several key terms within the EOs.

The Actions that Led to the Lawsuit

How did we get to this point? Here’s a brief timeline.

Jan. 20: President Trump signed 26 inauguration-day EOs, including Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs,” which called for “the termination of all discriminatory programs, including illegal DEI and ‘diversity, equity, inclusion and accessibility’ (DEIA) mandates, policies, programs, preferences and activities in the federal government, under whatever name they appear.”
Jan. 21: Trump signed Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which instructed federal departments not to issue contracts to private organizations that enforce DEIA frameworks, prevented affirmative action from being implemented by government contractors, revoked certain parts of the Equal Employment Opportunity (EEO) order and other orders in terms of federal contracting jobs, and called on federal agencies to investigate nine publicly traded companies for related practices.
Jan. 21: In a step to comply with Executive Order 14173, Charles Ezell, the acting director of the U.S. Office of Personnel Management (OPM), issued a memorandum (titled “Initial Guidance Regarding DEIA Executive Orders”) instructing the heads and acting heads of departments and agencies to terminate internal DEI programs.
Feb. 3: The National Association of Diversity Officers in Higher Education, the American Association of University Professors, Restaurant Opportunities Centers United, and the mayor and city council of Baltimore filed a lawsuit in Maryland district court, claiming Trump’s orders exceed executive legal authority and violate both the First and Fifth Amendments. In particular, the groups objected to EO provisions that directed federal agencies to terminate all “equity-related” grants and contracts, and required all federal grant recipients and contractors to certify they do not “promote DEI” programs that violate antidiscrimination laws, with potential False Claims Act liability for untrue certifications.
Feb. 5: U.S. Attorney General Pam Bondi issued a memo (titled “Ending Illegal DEI and DEIA Discrimination and Preferences”) to “all government employees” that laid out plans to end DEI initiatives at not just the Department of Justice (DOJ) but also private employers and educational institutions.

The Basis of the Judge’s Ruling

In his 63-page opinion, Judge Abelson found:

Provisions challenged by the plaintiffs were unconstitutionally vague (his most noteworthy statement, on Page 54, was “Vague laws invite arbitrary power”), and
The plaintiffs are likely to succeed on their claims under the First Amendment and the Fifth Amendment’s Due Process Clause.

Noting that a President is not exempt from the general provisions of the U.S. Constitution, the court found sufficient grounds to wholly stop enforcement of two EO provisions and halt a portion of a third. The ruling noted:

The termination provision (related to Executive Order 14151) may not be invoked to “pause, freeze, impede, block, cancel or terminate … or change the terms of any [awards, contracts or obligations].”
The certification provision (Executive Order 14173) may not be enforced, eliminating (at least for now) requirements for federal contractors and grantees to certify they do not operate DEI programs that violate federal antidiscrimination laws.
The enforcement threat provision (Executive Order 14173) may not be implemented to bring any anti-DEI enforcement action, including actions under the False Claims Act, against private entities or government contractors and grantees.

The court’s injunction did not extend to any other aspect of the DEI-focused EOs, such as measures with respect to the federal workforce. Importantly, the court also denied the plaintiffs’ motion that sought to enjoin the U.S. attorney general from pursuing enforcement actions against individual employers for their DEI programs or continuing to prepare an EO-required report identifying certain organizations for civil compliance investigations related to their DEI programs.

“Ensuring equity, diversity and inclusion has long been a goal, and at least in some contexts arguably a requirement, of federal antidiscrimination law,” Abelson wrote. “But the administration has declared ‘DEI’ to be henceforth ‘illegal,’ has announced it will be terminating all ‘equity-related’ grants or contracts — whatever the administration might decide that means — and has made ‘practitioners’ of what the government considers ‘DEI’ the targets of a ‘strategic enforcement plan.’ But the challenged orders do not define any of the operative terms, such as ‘DEI,’ ‘equity-related,’ ‘promoting DEI,’ ‘illegal DEI,’ ‘illegal DEI and DEIA policies,’ or ‘illegal discrimination or preferences’ — let alone identify the types of programs or policies the administration considers ‘illegal.’”

In regard to the specified provisions, Abelson wrote: “The termination provision leaves [federal] contractors and their employees, plus any other recipients of federal grants, with no idea whether the administration will deem their contracts or grants, or work they are doing, or speech they are engaged in, to be ‘equity-related.’ And the [Jan. 21] order leaves 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.’”

Next Steps for the Case and for General Employers

The preliminary injunction is unlikely to end efforts by the Trump administration to deter “DEI” initiatives (in name or function) in the private sector or at educational institutions. Given the defendants’ appeal, the NADOHE v. Trump case will head to the U.S. Court of Appeals for the Fourth Circuit. It is very possible the matter will move from there to the Supreme Court. Meanwhile, the official White House website, including the pages devoted to EOs 14151 and 14173, currently does not display any statement about or mention of the court’s preliminary injunction.

In addition, watch for some potential revisions to the EOs in question. The Holland & Knight LLP law firm stated, “A more narrowly tailored, content- and viewpoint-neutral EO could pass muster. A future EO with clearer definitions of ‘DEI’ or ‘equity-related’ terms and equal application to speech supportive of DEI activities or opposed to DEI activities could potentially withstand Constitutional scrutiny. In light of the U.S. Supreme Court’s recent decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, a revised EO aligned with the court’s decision in that case likely would pass judicial scrutiny.”

Regarding next steps for employers, first and foremost, the ruling shouldn’t lead organizations to let their guard down or put the issue of equitable and diverse workplaces on the backburner. As noted by several law firms, this case does not affect the enforcement priorities or actions by other federal agencies such as the Equal Employment Opportunity Commission, whose acting chair, Andrea Lucas, recently expressed a commitment to “rooting out unlawful DEI-motivated race and sex discrimination … consistent with the President’s executive order.”

Additional guidance from law firms included:

From Morrison Foerster LLP: “Companies should continue to conduct privileged risk audits of their DEI programs given that the risk of challenge to corporate DEI programs remains high from the federal government, certain state attorney generals and anti-DEI organizations. … Accordingly, companies should consider [action steps], including auditing their DEI programs under privilege for potential risks while not overcorrecting.”
From Littler Mendelson P.C.: “In promoting diversity and in talking about diversity efforts, employers must comply with the requirements of Title VII [of the Civil Rights Act] and other federal and state laws prohibiting discrimination. These laws are interpreted by the courts and not by the President. Employers should continue to exercise judgment in determining — within the scope of what the law allows — what is right for their business, employees and customer relations (including the government as a customer) when deciding how to maintain and support a diverse, well-qualified and productive workplace. These decisions are not always easy, so employers should seek assistance from their legal counsel in working through these issues.”

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