Federal Court Injunction Pauses Key Provisions of President Trump’s DEI Executive Orders

On February 21, 2025, the U.S. District Court for the District of Maryland issued a preliminary injunction that significantly impacts two of President Trump’s executive orders targeting Diversity, Equity, and Inclusion (DEI) programs. This ruling creates important breathing room for employers with federal contracts and grants while still leaving some uncertainty about the future landscape of DEI initiatives.  The federal government has appealed as of February 24, 2025, but as of the time of this blog post, no decision has been made on the appeal.

The Executive Orders at Issue

The court’s ruling addressed two executive orders:

• “Ending Radical and Wasteful Government DEI Programs and Preferencing” (January 20, 2025, or “J20 Order/EO 14151”)
• “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (January 21, 2025, or “J21 Order/EO 14173”)

What Was Blocked by the Court?

The court specifically enjoined three provisions that posed, in the court’s view, immediate threats to federal contractors and grantees:

1. The “Termination Provision” (J20 Order § 2(b)(i)) – This provision directed federal agencies to terminate “equity-related” grants and contracts “to the maximum extent allowed by law.” The court found this language unconstitutionally vague under the Fifth Amendment, because it failed to define what makes a grant or contract “equity-related” and provided no notice to contractors about how to maintain compliance.
2. The “Certification Provision” (J21 Order § 3(b)(iv)) – This provision would have required federal contractors and grantees to certify under penalty of the False Claims Act that they do not operate DEI programs that violate discrimination laws. The court determined this likely violated the First Amendment as a content-based restriction targeting pro-DEI speech while not imposing similar restrictions on anti-DEI principles that might also violate discrimination laws.
3. The “Enforcement Threat Provision” (J21 Order § 4(b)(iii)) – The court partially blocked this provision, which directed the Attorney General to take actions to “deter DEI programs or principles…that constitute illegal discrimination or preferences.” Specifically, federal agencies are now barred from bringing False Claims Act or other enforcement actions under this provision.

What Remains in Effect?

Importantly, the court did not completely block the executive orders. The injunction specifically declined to prevent the Attorney General from:

1. Preparing a report recommending strategic steps to “encourage the private sector to end illegal discrimination and preferences, including DEI”
2. Conducting investigations into potential violations of federal anti-discrimination laws

The Department of Justice has indicated these activities may continue and could potentially include criminal investigations.

What This Means for Employers

For employers with federal contracts or grants, this ruling provides temporary relief from several immediate concerns:

1. Protection from Contract/Grant Termination – Federal agencies cannot freeze, terminate, or change the terms of existing grants or contracts based solely on them being “equity-related.”
2. No DEI Certification Requirement – Contractors and grantees will not be required to certify that their DEI programs comply with anti-discrimination laws, at least while the injunction remains in effect.
3. Reduced False Claims Act Exposure – The threat of False Claims Act liability for maintaining certain DEI programs has been temporarily removed.

But employers should remain cautious for several reasons:

1. Preliminary Nature of the Ruling – This is not a final determination on the merits. The injunction could be reversed on appeal or modified as the case proceeds.
2. Ongoing Compliance Requirements – The injunction does not absolve employers from complying with existing anti-discrimination laws. Programs that discriminate based on protected characteristics may still create liability, regardless of whether they are implemented with good intentions to increase diversity.
3. Continued DOJ Activity – The Attorney General can still develop enforcement strategies and conduct investigations related to DEI programs suspected of violating discrimination laws.
4. Private Litigation Risk – The injunction does not prevent private lawsuits challenging DEI initiatives, which have increased since the Supreme Court’s June 2023 ruling in Students for Fair Admissions v. Harvard.

Conclusion

While this injunction provides temporary relief for federal contractors and grantees engaged in DEI activities, it does not represent a complete victory for DEI advocates. The legal challenges to these executive orders will continue to unfold, and the ultimate fate of these provisions remains uncertain. In this rapidly changing environment, employers should remain vigilant, ensure their programs comply with anti-discrimination laws, and be prepared to adapt as the legal landscape evolves.