Court clarifies that DEI executive orders are temporarily blocked for all federal agencies

In the early days of his second term, President Trump issued a series of executive orders (EO) that were aimed at reshaping the landscape of both federal and private sector policies. Two specifically targeted diversity, equity, and inclusion (DEI) initiatives:

1. EO 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” directs the termination of all DEI-related mandates, policies, programs, preferences, and activities within federal agencies. It further calls for the termination of “equity-related” grants or contracts and requires agencies to report all employees in DEI positions to the Office of Management and Budget.
2. EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” impacts the private sector, directing the attorney general to develop a strategic enforcement plan, identifying key private entities for civil rights investigations, recommending regulatory actions, and proposing potential litigation to curb DEI practices deemed discriminatory under the Trump administration’s interpretation of federal law. It also requires federal contractors and grant recipients to eliminate DEI programs that involve race- or sex-based preferences and certify that they do not operate any programs promoting DEI that violate any applicable federal anti-discrimination laws as a condition of receiving government funding.

Taken together, these EOs mark a sweeping rollback of DEI initiatives.

However, as anticipated, opponents of the EOs swiftly filed legal challenges. Most notably, a coalition of advocacy groups and city officials filed a lawsuit in a Maryland federal court last month, naming as defendants: President Trump in his official capacity, the Office of Management and Budget, the National Science Foundation, and the Departments of Justice, Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, and Transportation, along with their agency heads. The advocacy groups argued that the EOs are unconstitutionally vague and that they violate the First Amendment by restricting federal agencies’ speech based on content and viewpoint. They further asserted that the EOs violate the separation of powers doctrine because they restrict government spending that Congress approved.

The court agreed with the advocacy groups and city officials, finding that the EOs were both potentially discriminatory and written so vaguely that they could chill free speech due to the potential for “arbitrary and discriminatory enforcement.” As a result, in February, the court issued a preliminary injunction suspending the EOs nationwide. Under the preliminary injunction: (i) the Trump administration is blocked (at least for the time being) from terminating any federal contracts or grants related to DEI, and (ii) federal contractors and grant recipients are no longer required to certify that they are not promoting DEI. Significantly, the preliminary injunction does not impact the Trump administration’s directive to the attorney general to investigate private sector DEI initiatives and programming.

The case has seen a series of significant developments in recent weeks. On March 3, 2025, the court denied the Trump administration’s request to pause the preliminary injunction pending the administration’s appeal of the injunction to the U.S. Court of Appeals for the Fourth Circuit.

On March 10, 2025, the judge clarified that the preliminary injunction applies not only to the agencies named as defendants in the lawsuit, but also to “Defendants other than the President, as well as all other federal executive branch agencies, departments, and commissions, and their heads, officers, agents, and subdivisions.” The judge reasoned that any executive agency, department, or commission acting under the suspended portions of the EOs would be acting “pursuant to an order that plaintiffs have shown a strong likelihood of success in establishing is unconstitutional on its face.”

The court also explained that the EOs apply to all executive agencies, departments, and commissions, so the preliminary injunction is tailored to the agencies, departments, and commissions that were directed, have acted, or may act pursuant to the EOs. In addition, the court determined that blocking the EOs only for the agencies, the advocacy groups, and city officials specifically named as defendants would leave the plaintiffs at risk of having their speech chilled by many federal executive agencies that were not named in the suit. And limiting the preliminary injunction to only named agencies would also make the termination status of a federal grant, or the requirement to certify compliance by a federal contractor, turn on which federal executive agency the grantee or contractor relies on for federal funding, thus “causing inequitable treatment in an area in which uniformity is needed.”

Unless the Fourth Circuit stays the preliminary injunction, it will remain in place while the Trump administration appeals it. Reed Smith will continue to monitor this litigation for any further updates on the viability of President Trump’s DEI-related EOs.