We recently published a Special Alert related to President Trump’s executive orders on Diversity, Equity, and Inclusion (DEI). As an update, a recent legal challenge led to the temporary suspension of several DEI initiatives mandated by these executive orders affecting federal contractors and recipients of federal funding as well as other private employers. Specifically, the U.S. District Court for the District of Maryland issued a preliminary nationwide injunction as to significant portions of President Trump’s executive orders titled, “Ending Radical Government DEI Programs and Preferencing,” and “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.”

This decision prohibits the Defendants (including the Departments of Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, Transportation, and Justice; the National Science Foundation; and the Office of Management and Budget) and other persons who are in active concert or participation with them from:

1. Pausing, freezing, impeding, blocking, cancelling, or terminating any awards, contracts, or obligations, or changing the terms of any current obligations based on the provision in the executive orders ordering termination of all “equity-related” grants or contracts.
2. Requiring any grantee or contractor to make any “certification” pursuant to the executive order requiring certification that they do not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws and acknowledging that compliance with anti-discrimination laws is “material” for purposes of the False Claims Act.
3. Bringing any False Claims enforcement action, or other enforcement action, pursuant to the executive order requiring the agencies to make a plan of specific steps to deter DEI programs or principals. This portion of the Preliminary Injunction applies to all private employers insofar as it bars enforcement actions against such employers in connection with the executive orders, but it does not bar government investigations in connection with the orders.

The decision was based on findings that the related executive orders likely violate the First Amendment guarantee of free speech and violate Due Process as they are unconstitutionally vague. The court did not reach the question of whether these executive orders also violate the Constitutional principle of separation of powers.

Employers should stay informed as legal challenges progress. It is not yet clear how the Trump Administration will interpret the Preliminary Injunction, and it is likely they will appeal the decision. Track the latest developments and case status here. There are at least three cases challenging various aspects of these executive orders, and this is an ever-evolving issue. In addition, Employers should be aware that they can still face legal challenges to DEI programs from private plaintiffs or the government on the grounds that the programs violate existing law (including, for example, Title VII, Section 1981, and state anti-discrimination laws).

If you have questions about how this new court decision and the Executive Orders affect your business, or if you would like assistance with an audit of your existing DEI programs, please contact us.

• Emily J. Fox (efox@wilsonturnerkosmo.com)
• Katherine M. McCray (kmccray@wilsonturnerkosmo.com)

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.