Recent Court Decision Temporarily Pauses DEI Related Executive Orders
February 28, 2025
Shuttleworth & Ingersoll Employment Law Practice Group
Background
Since entering office, President Trump has utilized Executive Orders to both rescind previous Executive Orders and further shape policy prospectively. The issues of Diversity Equity and Inclusion (“DEI”) have been a centerpiece of the actions taken by the incoming administration. In his first day of office, President Trump rescinded dozens of previous Executive Orders in Executive Order 14148 entitled Initial Rescissions of Harmful Executive Orders and Actions. See initial-rescissions-of-harmful-executive-orders-and-actions-article While Executive Order 14148 rescinded certain policies regarding DEI, those affected by this particular Executive Order were mainly confined to actual federal agencies. Executive Order 14151 also addressed DEI in the federal agency context. See ending-radical-and-wasteful-government-dei-programs-and-preferencing-article
In a separate Executive Order 14173, entitled Ending Illegal Discrimination and Restoring Merit-Based Opportunity, President Trump rescinded several previous Executive Orders, including Executive Order 11246 of September 24, 1965, related to Equal Employment Opportunity. See ending-illegal-discrimination-and-restoring-merit-based-opportunity-article Executive Order 14173 includes:
1. Prohibiting the Office of Contract Compliance Programs (“OFCCP”) from a. promoting diversity; b. holding contractors and subcontractors responsible for affirmative action; and c. allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.
2. Requiring contractors or grant recipients to a. agree that its compliance in all respects with all applicable Federal anti-discrimination laws; b. certify that it does not operate any programs promoting DEI that violate applicable Federal anti-discrimination laws.
3. Encouraging the private sector to end illegal DEI discrimination and preferences. This measure includes each agency selecting up to nine publicly traded corporations to take action against, including large non-profit corporations, 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 in order to deter DEI programs or principles that constitute illegal discrimination or preference. These will be included in a report that will eventually be submitted to the Assistant to the President for Domestic Policy.
4. Exempting lawful Federal or private sector employment and contracting preferences for veterans.
Court Case Affecting Implementation of Particular Executive Orders
A U.S. District Court in Maryland has granted a preliminary injunction in regard to the enforcement of certain provisions in President Trump’s executive orders, including Executive Order 14173. The Court held that the plaintiffs were likely to prove that the term “illegal DEI” was unconstitutionally vague under the Fifth Amendment and also unconstitutionally violated free speech under the First Amendment. The temporary injunction is nationwide and prohibits certain enforcement actions associated with particular portions of DEI executive orders.
The Court’s injunction, however, does not enjoin other aspects of the DEI executive orders. For instance, the Attorney General can still pursue enforcement actions against employers related to DEI programs if the Attorney General can demonstrate that a particular DEI program is in violation of federal law.
Implications for Employers
Keep in mind that this ruling by the Maryland Court will most certainly be appealed by the Trump Administration. The Executive Orders pertinent to DEI still have potential consequences for those contracting with the federal government. Additionally, even private sector companies currently not contracting with the federal government may have DEI policies criticized and even reviewed by the Trump Administration notwithstanding the current temporary injunction. Contractors and employers should initially assess their current guidelines regarding DEI to ensure compliance with new DEI related Executive Orders and any further guidance provided by the administration and the courts.
Upcoming Roundtable on DEI
On April 3, 2025, Shuttleworth will be hosting a roundtable presentation and discussion on the current state of DEI, including these recent actions by the administration and the courts. In the round table Mark Hudson will discuss recommended steps for employers with respect to their DEI programs and planning for compliance with recent changes. Please reach out to Mark or any of our Shuttleworth Employment attorneys for any concerns or questions you may have regarding your DEI programs and obligations.