Update 3/17/25: A three-judge panel of the Fourth Circuit Court of Appeals has issued a stay of the district court’s injunction pending appeal, which means that the challenged provisions of the Trump executive orders continue in effect at present.

What is “illegal DEI”?  That question was at the heart of a federal district court decision out of Maryland that issued a preliminary injunction against portions of the Trump executive orders on diversity, equity and inclusion.  At present, the court has blocked the administration from implementing three key aspects of the Trump executive orders that directly impact federal government contractors and grant recipients, as well as private sector employers at large.  Specifically the federal government is:

• blocked from bringing enforcement actions against private sector employers as part of an initiative to deter “DEI programs or principles… that constitute illegal discrimination or preferences;”
• blocked from requiring federal contract and grant recipients to sign a certification that they do “not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws;”
• blocked from bringing False Claims Act or other enforcement actions based on the certification; and
• blocked from pausing, freezing, or terminating all “equity-related” grants or contracts.

Due Process Prohibits Unreasonably Vague Laws

The court observed that the Trump executive orders repeatedly reference “illegal DEI,” “equity-related,” “promoting DEI,” and “illegal discrimination or preferences,” but they do not identify the types of programs or policies the administration considers “illegal.”  The court observed that the Fifth Amendment assures individuals and organizations “due process,” that they will know what the law requires of them so they can act accordingly, and that those enforcing the law will not act in an arbitrary or discriminatory manner.  While some vagueness in the law is permissible, the court observed that the government must meet the highest standards of precision when it is regulating areas that touch on constitutional rights, particularly the First Amendment.  The court held that the plaintiffs likely would be able to show that the executive orders, with their plethora of undefined terms and their threat of terminating the contracts and grants or pursuing legal actions against noncompliant organizations, were unconstitutionally vague under the Fifth Amendment.

Free Speech Restricts Government Actions

The court further held that the executive orders seek to deter speech and the expression of messages with which the government disagrees, which is a “blatant” form of content discrimination in violation of the First Amendment.  The First Amendment restricts government actions that target the content of communications.

With respect to federal contractors and grant recipients, the court observed that the government may place certain limits on its spending programs as long as those limitations also recognize First Amendment protections.  The court cited Supreme Court decisions holding that the government (i) may not terminate a government contract based on constitutionally protected speech, and (ii) may not leverage its funding to regulate speech that falls outside the scope of the government-funded program.

Reviewing the language of the executive orders and initial government actions taken to implement them, the court found that the clear purpose and effect of the certification requirement was to restrict certain speech, namely that related to equity, inclusion, and diversity.  The court held that the plaintiffs would likely prevail in showing that the certification thereby violates the First Amendment.

As to the broader private sector, the court found that the federal government’s threatened enforcement actions target purely private speech based on undefined standards.  The court further found that the government was threatening only those espousing a particular viewpoint in support of DEI, and was not similarly targeting anti-DEI principles that may violate existing anti-discrimination laws.  Viewpoint discrimination by the government is not permissible under the First Amendment.  As such, the court concluded that the groups challenging the executive orders had clearly established they face irreparable harm and will likely succeed in proving their case, such that the issuance of a preliminary injunction was warranted.

Round 2 Again Sided with Free Speech and Due Process

The federal government has appealed the district court’s decision and asked the district court to stay its preliminary injunction pending that appeal.  On March 3, 2024, the district court declined the stay request, based on its prior analysis of the unconstitutionality of the challenged provisions.  The court considered the harm to the private sector and federal contractors from the chilling effect of the executive orders against the federal government’s interest in “’intra-executive policy implementation’” among federal agencies and their enforcement of antidiscrimination laws.  On balance, the court held that the plaintiffs’ First and Fifth Amendment rights should be given priority.  As a result, the blocks issued by the court remain in place at present.

Implications for Employers

First and foremost, employers can catch their breath.

Second, organizations can use this time while the government’s appeal is pending to consider what DEI programs and pronouncements they have, whether those are consistent with their current policy priorities, and if they are the most effective approach to achieve their objectives.  Many law firms have been recommending wholesale audits of organizations’ DEI practices and offering their services to do so under the protection of attorney-client privilege.  I agree that such an assessment is advisable, but there are opportunities to do so without incurring vast legal bills.

Legal counsel can identify for you the types of internal materials you should be seeking.  Once you have gathered and organized that information, it is prudent to get legal advice on the liability risks posed and options to mitigate your risks.  But most of the time, the more painstaking process of gathering and organizing the information for review by legal counsel can be undertaken by the organization itself.

Third, decide on a course of action going forward.  Even if the court order blocking these aspects of the Trump executive orders is upheld and the sweeping government actions are blocked, the anti-DEI movement is not going away too soon.  The Equal Employment Opportunity Commission (EEOC) has always had an enforcement arm that takes on cases initially filed by individuals and it uses those cases to pursue the federal government’s antidiscrimination enforcement agenda.  That practice will continue, but the EEOC has already made clear that under this administration the cases it will be looking to support include allegations of discrimination by white individuals based on race, as well as claims that foreign nationals were favored over American workers.

The strong backlash by the Trump administration is supported by a public sense that DEI has cost talented people opportunities.  Therefore, individual employees, and organizations advocating on their behalf, also will continue to file claims of discrimination in support of this agenda, as they have been doing since the Supreme Court’s June 2023 decisions upending affirmative action in college admissions decisions.

Employers need to be prepared for that but can do so while recognizing the effects of systemic challenges that impede people from maximizing their potential.  Just as a rising tide lifts all boats, now is the time for organizations to focus more intensely on identifying people with talent.  Be open-minded in who you select and do not default to selections based on racial, gender, or other protected characteries.  Help those identified with training to close skill gaps and mentoring to support their career advancement.

This is the ninth in our series of articles on the Trump Executive Orders on affirmative action (AA) and diversity, equity and inclusion (DEI) that collectively outline how we got here, what has been eliminated, what new mandates have been issued, what has survived intact, and what employers can do going forward if diversity remains an important value for them.  Past articles covered the executive orders themselves, what they require, and what organizations can and should consider doing in response.

By Tracey I. Levy