Notable Developments
On February 21, 2025, a federal judge issued a preliminary injunction that essentially halts the implementation of key provisions of the Executive Orders regarding DEI (decision from the US District Court for the District of Maryland). The preliminary injunction prohibited the new administration from:
- Terminating, pausing or changing the terms of federal awards, contracts, or obligations on the basis of the "termination provision" of Executive Order 14151 (i.e., the Executive Order's provision that ordered federal agencies to terminate "equity-related" grants or contracts);
- Requiring recipients of federal grants or contracts to make any certification or representation pursuant to the "certification provision" of Executive Order 14173 (i.e., the Executive Order's provision that ordered federal agencies to include - in every contract or grant award - terms requiring contractual counterparties or grant recipients to certify that they do not "operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws"); and from
- Bringing enforcement actions (such as, but not limited to, False Claims Act actions) pursuant to the "enforcement threat provision" of Executive Order 14173 (i.e., the Executive Order's provision that ordered the US Attorney General to submit recommendations for enforcing federal civil rights laws and for "taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI" - with specific steps to "deter DEI programs or principles [...] that constitute illegal discrimination or preferences." The EO also required each agency to prepare a list of potential civil compliance investigations of certain private sector entities).
On March 14, 2025, the US Court of Appeals for the Fourth Circuit granted the administration's motion to stay enforcement of the the district court's preliminary injunction, pending appeal.
Main Takeaways
- Executive Orders issued by the new US President target Diversity, Equity and Inclusion (DEI) initiatives at federal agencies and the private sector, and introduce new requirements that will impact federal contractors.
- In-house lawyers should consider the implications for their organization. Consider steps such as reviewing the risk profile of the enterprise, the robustness of anti-discrimination policies and employment practices, and assess potential litigation risks.
- Federal contractors and grant recipients should consider assessing whether their organization's policies and procedures might expose them to increased risk of litigation in connection the new requirements that will result from the order.
- Employers and recipients of federal grants or contract awards should also monitor court cases and decisions regarding the Executive Orders (for example, the case mentioned at the top of this section).
Context
- The January 21 order titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" targets DEI initiatives at federal agencies.
- It also directs federal agencies to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
- It also directs the Attorney General to prepare a report with a plan under which "each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars."
- The order also mandates actions by federal agencies that will impact federal contractors, with new requirements in federal grants and contracts. Federal contractors and grant recipients will be required to certify that they do "not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws."
Learn more about the implications for employers
- DEI Injunction Falls, For Now: 4th Circuit Allows Trump Administration Agencies to Enforce EOs, by Jackson Lewis P.C. (March 17, 2025)
- Federal Court Blocks Provisions of Trump Administration’s ‘Illegal DEI’ Executive Orders, by Jackson Lewis, P.C. (February 24, 2025)
- What Now? Critical DEI Considerations for Private-Sector Employers Under Trump Administration 2.0, by Cozen O'Connor (January 30, 2025)
- Trump Administration Revokes EO 11246, Prohibits ‘Illegal’ DEI: What the EO Means for Employers, by Jackson Lewis P.C. (January 28, 2025)
- Sample Non-Discrimination Policy
Watch
Webcast: DEI Today: Part I - A Practical Discussion of the New Administration’s Executive Orders on DEI and What it Means for Employers (February 5, 2025, On Demand, sponsored by Jackson Lewis P.C.)
Webcast: DEI Today: Part II - A Practical Discussion of the New Administration’s Executive Orders on DEI and What it Means for Employers (March 5, 2025, On Demand, sponsored by Jackson Lewis P.C.)