The Ongoing Battle Between Judicial and Executive Power: The District Court of Maryland Enjoins President Trump’s DEI Orders on a Nationwide Basis

On Friday, February 21, 2025, the United States District Court for the District of Maryland entered a preliminary injunction halting provisions of two of President Trump’s executive orders that sought to effectively eliminate diversity, equity, and inclusion programs implemented by private employers, including government contractors. The injunction is effective nationwide, with the court finding that the legal challenges to these executive orders had a substantial likelihood of success on the merits.

What Orders Were Challenged?

The National Association of Diversity Officers in Higher Education and other named plaintiffs filed suit challenging three provisions of Executive Orders 14151 and 14173 issued by President Trump on January 20 and January 21, 2025, respectively. The three challenged provisions are as follows: (1) the “Termination Provision,” which directed each agency, department, or commission of the federal government to work with the attorney general to terminate all equity-related grants or contracts; (2) the “Certification Provision,” which required every party to a government contract to certify that it does not have any programs that promote DEI and that violate applicable federal anti-discrimination laws under penalty of prosecution under the False Claims Act; and (3) the “Enforcement Threat Provision,” which directed the attorney general to develop measures to encourage the private sector to end illegal preferences, including DEI, to deter such DEI programs and principles, and to identify potential compliance investigations against publicly traded companies, medical associations, educational institutes, and others, to promote such deterrence (collectively, the “DEI Orders”). As explained below, the court enjoined the entirety of the Termination and Certification Provisions, and part of the Enforcement Threat Provision, again on a nationwide basis, subject to further proceedings on the merits and certain appeal by the administration that campaigned so heavily against DEI programs.

What Were the Bases of the Challenges?

The First and Fifth Amendments to the U.S. Constitution were front and center in the challenges to the DEI Orders.

The plaintiffs first attacked the Termination and Enforcement Threat Provisions as violating the Due Process Clause of the Fifth Amendment because they were too vague to be understood. The Due Process Clause states that no one may be denied of life, liberty, or property without due process of law, and requires the government to give fair notice of what conduct is prohibited. In this case, neither of the challenged executive orders defined what constituted a “DEI program,” leaving employers with substantial uncertainty as to what kinds of programs would jeopardize the termination of existing contracts or expose them to False Claims Act risk — including both criminal and civil penalties and exposure to private qui tam lawsuits — upon entering into a government contract. Understanding that the Supreme Court of the United States decided in 2023 that race cannot be considered as a factor in admissions in its ruling striking down affirmative action, see Students for Fair Admissions, Inc. (SFFA) v. President & Fellows of Harvard College (Harvard) and SFFA v. University of North Carolina (UNC), 600 U.S. 181 (2023), that decision left open many questions regarding how private and even public sector DEI initiatives could still co-exist, especially considering that DEI is broader conceptually and oftentimes does not even include the granting or an expression of preference(s) based on race, gender, national origin, etc.

The plaintiffs also challenged the Certification and Enforcement Threat Provisions as violating the First Amendment’s protection against governmental infringement on the right to free speech. They argued that the Certification Provision unlawfully required federal contractors to affirmatively disavow, i.e., speak against, DEI initiatives, and that the Enforcement Threat Provision similarly threatened the private sector with governmental scrutiny/penalties if they did not effectively adopt the administration’s views on DEI.

Finally, the Termination Provision was also challenged as a violation of separation of powers, arguing that the Executive Branch was encroaching on Congress’ power to allocate funds.

How Did the Court Resolve the Challenges?

Understanding the legal and political weight of these challenges, this case was assigned to Judge Adam Abelson, a former U.S. Magistrate Judge who was appointed to fill a district court vacancy by President Biden in 2024. Factoring in the politics associated with his ruling, Judge Abelson liberally cited opinions of Supreme Court Justice Gorsuch in reaching his conclusion that the plaintiffs showed a substantial likelihood that the Termination and Enforcement Threat Provisions were impermissibly “vague” and violated the Due Process Clause of the Fifth Amendment. He specifically found that the term “equity-related grants or contracts” in the Termination Provision likely invited arbitrary and discriminatory enforcement and did not give fair notice of how contractors could adapt their conduct to avoid termination of their contracts. He similarly posited that the government could effectively (and vaguely) decide what “DEI” means in the context of the Certification Provision. Notably, in oral argument before Judge Abelson, attorneys for the administration seemed to acknowledge that there is uncertainty about what programs or policies referred to as “DEI” are lawful after the Students for Fair Admission decision.

On the First Amendment challenge, Judge Abelson concluded that the plaintiffs had a substantial likelihood of proving that the Certification and Enforcement Threat Provisions violated the First Amendment’s prohibition against content and viewpoint discrimination. In this regard, the First Amendment historically has prohibited the government from restricting expression because of the message, ideas, subject matter, or content. Accordingly, any restrictions based on content are presumptively unconstitutional and may be justified only if they are narrowly tailored to serve compelling state interests. The court then reasoned, citing, in part, to Supreme Court Justice Alito, that the most egregious form of discrimination was based on viewpoint and that the State cannot burden the speech of others to tilt the public debate. Moreover, while federal contractors typically accept certain restrictions on their freedom for the privilege of doing business with the government, the court held that such restrictions could not discriminate based on viewpoint.

Having found that the plaintiffs had a substantial likelihood of success on the merits that the DEI Orders violated both the First and Fifth Amendments, as described above, the court did not reach the argument about separation of powers. In fact, the court held that it would not enjoin the attorney general from preparing the reports directed by the president, as this directive was uniquely within the president’s purview and powers.

What Happens Next?

Given overarching political narratives, the court’s decision very likely will be appealed to the United States Court of Appeals for the Fourth Circuit, and de facto appealed in the court of public opinion. For employers and government contractors, the calculus is still far more complicated, knowing that the current administration and private interest groups are very intent through all available legal and persuasive means to attack and eliminate DEI programs. As one example, the State of Missouri has filed suit against Starbucks arguing that its DEI program promoted the hiring of women and people of color and thus slowed down the delivery of coffee orders. Similar lawsuits will likely follow. And government contracts may still be threatened for a myriad of reasons if DEI programs are still in place. For boards and executives, the decision of whether and how to continue DEI programs is weighty, as pursuing principle clearly carries risk, albeit risk that may be clarified as appeals are decided.

What Steps Should Companies Take in Light of This Decision?

• Continue to Assess Any Current DEI Policies/Programs: At the stakeholder level, companies should make informed decisions on their current policies and programs that touch on any aspect of DEI, including programs that were paused or modified following the issuance of the DEI Orders.
• Conduct a Privileged Review: If companies decide to continue DEI-related programs and policies, the specific content of and communications relating to these programs should be reviewed for potential non-compliance with existing legal precedent, as well as with an eye toward potential legal attacks. For government contractors, this is especially true in anticipation of potential attacks on the future of issued contracts and pending proposals.
• Communicate With Employees and Business Partners: With associated legal advice, companies should consider reevaluating their inward- and outward-facing communications on their DEI programs for consistency with any stakeholders and to insulate (as much as possible) against legal risk.
• Monitor Further Legal Developments: As noted above, the District Court of Maryland’s decision is only one step in many that will follow. In addition to monitoring case-related developments, companies should continue to monitor federal agency activity, including specifically relating to government contracts.