Overview
On February 21, 2025, Judge Adam B. Abelson of the US District Court for the District of Maryland issued an order (preliminary injunction) preliminarily enjoining the enforcement of select provisions of President Trump's recent Anti-DEI Executive Orders (Exec. Order No. 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, Jan. 20, 2025, and Exec. Order No. 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, Jan. 21, 2025 (together, the EOs)). The court issued the preliminary injunction after 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, Maryland filed a Complaint and Motion for Temporary Restraining Order and/or Preliminary Injunction challenging the EOs as unconstitutional violations of Separation of Powers principles and of the Spending, Fifth Amendment Due Process, and First Amendment Free Speech clauses. In light of this new development, private sector entities should continue to evaluate any planned or existing DEI initiatives against the risks of future agency enforcement. It is crucial for companies to conduct independent assessments to ensure their DEI programs are compliant with federal antidiscrimination laws, both in their design and implementation.
The court granted plaintiffs a partial preliminary injunction, preventing the enforcement of the EOs' Termination, Certification, and Enforcement Threat provisions, and provided the following rationale:
- Termination Provision: Section 2(b)(i) of Exec. Order No. 14151 directs executive agencies to "terminate . . . all 'equity-related' grants or contracts" (Termination Provision). The court held that plaintiffs would likely succeed on their claim that this provision is void for vagueness under the Fifth Amendment. It reasoned that the Termination Provision "invites arbitrary and discriminatory enforcement" given the lack of clarity on the meaning of "equity-related." Moreover, this vagueness leaves federal grant recipients and contractual parties without required notice as to what activities are prohibited and what, if anything, they can do to bring their grants into compliance.
- Certification Provision: Section 3(b)(iv) of Exec. Order No. 14173 directs executive agencies to require all grantees and contractual counterparties to 1) agree that compliance with federal anti-discrimination laws is "material to the government's payment decisions" and 2) certify that they do not operate "any programs promoting DEI that violate any applicable federal antidiscrimination laws" (emphasis added) (Certification Provision). The court held that the plaintiffs would likely succeed on their claim that this Certification Provision violates the First Amendment, as it seeks to impose an unconstitutional content-based restriction on free speech rights. Furthermore, the provision is unduly broad and seeks to restrict any programs operated by federal contractors' and grantees' work, even those functions that are not federally funded. The court reasoned that the language of the provision makes clear that its sole purpose is to demand that federal contractors and grantees "essentially certify that there is no 'DEI' (whatever the executive branch decides that means) in any aspect of their functioning." This amounts to a "'condition[s] that seek[s] to leverage funding to regulate speech outside the contours of the program itself.'" (quoting Agency for Int'l Dev. v. All. for Open Soc'y Int'l, Inc., 570 US 205, 214-15 (2013) (AID)). The court relied on the Supreme Court’s ruling in AID to affirm that "[t]he Executive's authority to fund its policy priorities is still subject to the First Amendment, particularly where it seeks to encroach on protected speech made outside the scope of the federal funding." See id.; see also Rust v. Sullivan, 500 US 173, 197 (1991).
- Enforcement Threat Provision: Section 4(b)(iii) of Exec. Order No. 14173 provides, in relevant part, that executive agencies should take measures to end and deter DEI programs or principles "that constitute illegal discrimination and preferences,” including identifying up to nine civil compliance investigations of noncompliant institutions (Enforcement Threat Provision). The court found that plaintiffs would likely succeed on their claim that the Enforcement Threat Provision violates the First Amendment, as it constitutes an inherently unconstitutional viewpoint-based restriction on protected speech (i.e., views in support of DEI). Furthermore, the court held that plaintiffs would likely succeed on their claim that this provision is void due to vagueness under the Fifth Amendment because neither EO makes clear what programs, principles, and practices are considered "illegal," leaving federal grant recipients and contractual counterparts without required notice about what might be targeted in a threatened enforcement action.
On February 24 and February 25, 2025, respectively, defendants filed notice of their impending appeal of the court's order and moved to stay the preliminary injunction pending the resolution of that appeal. Steptoe will continue to monitor developments surrounding the Executive Orders and provide timely updates. Be sure to check back here regularly for future updates and additional insights. For previous information on this topic, please refer to our earlier client alert: [New Executive Order Targets Private Sector for Federal Investigations and Regulations Aimed at DEI Programs].
