Business and Legal Insights

In a 63-page order, Judge Adam B. Abelson, a U.S. District Judge for the District of Maryland, issued a nation-wide preliminary injunction that struck down as unconstitutional significant portions of Executive Order 114173 (issued January 21, 2025) entitled “Ending Illegal Discrimination and Restoring Merit Based Opportunity” and Executive Order 14151 (issued January 20, 2025) entitled “Ending Radical and Wasteful Government DEI Programs and Preferencing.”  See Nat’l Ass’n of Diversity Officers in Higher Education v. Trump, __ F. Supp. 3d __, 2025 WL 573764 (D. Md. Feb. 21, 2025).

The plaintiffs challenged three portions of the executive orders: (1) the Termination Provision, which required executive agencies to “terminate . . .  ‘equity related’ grants or contracts;’” (2) the Certification Provision, which directed such agencies to include in every contract or grant award an enforceable (under the False Claims Act) certification that the  contractor or grantee “’does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws;’” and (3) the Enforcement Threat Provision, which directed the Attorney General to take “’appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI,’” to “deter” such “programs or principles,” and to identify potential civil compliance investigations (the “Enforcement Threat Provision”). The Executive Orders provided no definitions of any of these concepts or programs.

The court held that the plaintiffs were likely to prove that the Termination and Enforcement Threat Provisions were unconstitutionally vague. The Termination Provision left large swaths of contractors and their employees “with no idea whether the administration will deem their contracts or grants, or work they are doing, or speech they are engaged in, to be “’equity related.’” Similarly, the Enforcement Threat Provision put the private sector at a similar loss with respect to “whether the administration will deem a particular policy, program, discussion, announcement, etc. to be among the ‘preferences, mandates, policies, programs, and activities’ the administration now deems ‘illegal.’”

Further, the court held that plaintiffs were likely to prove that both the Certification Provision and the Enforcement Threat Provision unconstitutionally abridged First Amendment guarantees of freedom of speech and embodied one of the “most ‘blatant’ and ‘egregious form[s] of content discrimination,’” namely, “viewpoint discrimination,” where the government seeks to restrict expression with which it disagrees.

In particular, the court held that the Certification Provision operated as a content-based restriction on the speech rights of federal contractors and grantees, and extended to all of their work, whether funded by the government or not. The court held that plaintiffs also were likely to show that the provision operated as facially unconstitutional “viewpoint discrimination” order, especially it was likely designed to induce “federal contractors and grantees to apply an overinclusive definition of illegal DEI to avoid risking liability.”

The court held that plaintiffs were also likely to prove that the Enforcement Threat Provision violated the First Amendment because it threatened enforcement actions (by way of civil compliance investigations) “for engaging in protected speech.” The court noted that it expressly focused on deterring DEI programs or principles that constitute illegal discrimination or preferences without a similar restriction on anti-DEI principles that may also violate anti-discrimination laws. “That is textbook viewpoint-based discrimination.”  The court held that the plaintiffs were likely to establish that the provision also was an unconstitutional content-based restriction on protected speech and unconstitutionally vague. The court, however, did not enjoin the investigative portion of the Enforcement Threat Provision to the extent “it is merely a directive from the President to the Attorney General to identify ‘’a plan of specifics steps or measures to deter DEI programs or principles . . .that constitute illegal discrimination or preferences.”

The Government has the right to promptly appeal the preliminary injunction.

As litigation continues regarding these executive orders, it is important for businesses to consult their attorney to understand the implications of these changes. For more information, please consult with labor and employment counsel or reach out to blog author Mary Ruth Houston or any member of the Shutts Labor and Employment Practice Group.