On Friday, February 21, 2025, the United States District Court for the District of Maryland issued a preliminary injunction against key provisions of executive orders issued by President Trump that are aimed at curtailing the advancement of diversity, equity, and inclusion (DEI) programs, practices, and funding. The court's ruling in National Association of Diversity Officers in Higher Education v. Trump scrutinized three main provisions: the "Termination Provision," the "Certification Provision," and the "Enforcement Threat Provision," each of which is described further below. Here's a comprehensive breakdown of the court's analysis and findings on these provisions.
I. Termination Provision
Vagueness and Arbitrary Enforcement
The Termination Provision, found in Section 2(b)(i) of Executive Order 14151 (Jan. 20, 2025) (also known as "Ending Radical and Wasteful Government DEI Programs and Preferencing"), direct federal agencies to terminate all "equity-related" grants or contracts within 60 days from the date of the Order. The court found this provision to be unconstitutionally vague, primarily because it fails to define what constitutes "equity-related" grants or contracts.
The court noted that the term "equity" itself is broad and lacks a clear definition within the context of the executive order. For example, the provision does not specify whether "equity" is limited to diversity, equity, and inclusion (DEI), or diversity, equity, inclusion, and accessibility (DEIA), or whether it extends beyond these concepts. And when coupled with the term "related," the lack of a clear definition enhances further the ambiguity in the definition, as it becomes unclear how strong or tenuous a connection must be for a grant or contract to be considered "equity-related."
The court posited a few hypothetical examples to illustrate the potential for misinterpretation and to underscore the provision's failure to provide clear guidance:
- If an elementary school uses Department of Education funding for technology access and a teacher uses a computer to teach the history of Jim Crow laws, could this be deemed "equity-related"?
- If a road-construction grant is used to fill potholes in a low-income neighborhood instead of a wealthy neighborhood, does that render it "equity-related"?
- If a university grant funds a staff person who teaches about sexual harassment and consent, could the funding for that person's salary be stripped as "equity-related"?
These examples leave grantees in each instance to guess what might be considered "equity-related" or risking the loss of funding for activities that may not reasonably fall under that category.
Additionally, the lack of specificity invites arbitrary and discriminatory enforcement and could lead to inconsistent interpretations and applications across different federal agencies, forcing agency heads to interpret the term on an ad hoc basis. This inconsistency could affect billions of dollars in federal funding and undermine due process.
Lack of Notice
The court also highlighted that the Termination Provision fails to provide current grantees with adequate notice about what activities are prohibited. Grantees are left uncertain about how to conform their policies, programs, and speech to avoid termination of their grants or contracts. This lack of clarity could result in the termination of grants and contracts for activities that grantees might not reasonably consider "equity-related," thereby trapping the innocent by not providing fair warning.
II. Certification Provision
Content-Based Restriction on Speech by Targeting Specific Viewpoints
The Certification Provision, detailed in Section 3(b)(iv) of Executive Order 14173 (Jan. 21, 2025) (also known as "Ending Illegal Discrimination and Restoring Merit-Based Opportunity"), requires federal contractors and grantees to certify under threat of perjury and False Claims Act liability that they do not operate any DEI programs that the government might contend violate federal anti-discrimination laws. In a recent client alert, we highlighted various risks related to this requirement.
The court found this provision to be a content-based restriction on speech. The court noted that the Certification Provision specifically targets speech related to DEI, which the government disfavors, but does not address other viewpoints that may also be relevant to federal anti-discrimination laws.
Leveraging Funding to Regulate Contractor Business Operations Broadly
The court also noted that the Certification Provision would conceivably require federal contractors and grantees to avoid DEI-related activities altogether to comply with the certification requirement, regardless of whether these programs are funded by federal money.
The court outlined evidence of the language that current federal contractors and grantees are expected to certify to under the Certification Provision. For example, a federal contractor received a notice demanding certification that it "does not operate any programs promoting Diversity, Equity, and Inclusion that violate any applicable Federal anti-discrimination laws." Similarly, the National Endowment for the Arts (NEA) released compliance language requiring grant applicants to agree not to "operate any programs promoting [DEI] that violate any applicable Federal anti-discrimination laws." These examples confirm that the provision's plain language is being enforced to restrict speech related to DEI across all aspects of contractors' and grantees' operations regardless of the scope of the federal funding. The court emphasized that attempts to leverage federal funding to regulate speech outside the contours of a federally funded program is precisely what the Supreme Court's decisions in Agency for Int'l Dev. v. All. for Open Soc'y Int'l, Inc., 570 U.S. 205, 214-15 (2013) and Board of Cnty. Com'rs, Wabaunsee Cnty., Kan. v. Umbehr, 518 U.S. 668, 675-76 (1996) prohibit.
The court found that the Certification Provision's impermissibly extends beyond the scope of federal funding and attempts to impact all aspects of the contractors' and grantees' operations by leveraging federal funding to do so.
III. Enforcement Threat Provision
Viewpoint-Based Discrimination
The Enforcement Threat Provision, found in Section 4(b)(iii) of Executive Order 14173, directs the Attorney General to take measures to deter DEI programs or principles that constitute illegal discrimination or preferences. The court determined that this provision constitutes a textbook example of viewpoint-based discrimination in violation of the First Amendment, because the provision's focus is on deterring DEI programs or principles, without a similar restriction on anti-DEI principles that may also violate federal anti-discrimination laws.
The court also noted that the government's threat of enforcement is not just targeted toward enforcement of federal law, but also expressly targets and threatens the expression of views supportive of equity, diversity, and inclusion. As such, the Enforcement Threat Provision likely induces self-censorship among private sector entities. To avoid potential enforcement actions, these entities will likely be forced to avoid DEI-related activities altogether.
Vagueness and Arbitrary Enforcement
The court opined that the chilling effect on speech is a particular concern given the vagueness of what constitutes "illegal DEI." Like the Termination Provision, the Enforcement Threat Provision's broad and undefined terms exacerbate its unconstitutional nature. Entities must guess which DEI programs the government will deem "illegal DEI discrimination and preferences." This vagueness, coupled with the threat of civil compliance investigations, creates a significant risk of arbitrary enforcement. The court also noted that the delegation of basic policy matters to agencies otherwise tasked with enforcing the law increases the risk of arbitrary and discriminatory application and is contrary to law.
Evidence of Broad Application
The court pointed to evidence showing that the Enforcement Threat Provision is being applied broadly to the private sector. For example, the White House's fact sheet released a day after issuing the Order claims that "radical DEI has dangerously tainted many of our critical businesses and influential institutions." Similarly, the Attorney General's February 5, 2025, memorandum to internal DOJ employees regarding the interpretation of the Order specifically states that DOJ components should pay particular attention to ending references to DEI or DEIA, including references to "unconscious bias," "cultural sensitivity," and "inclusive leadership."
Furthermore, on February 11, 2025, Brendan Carr, the Chair of the Federal Communications Commission, sent a letter to the CEO of Comcast Corporation regarding "Comcast and NBCUniversal's Promotion of DEI." Carr wrote in the letter that he was "concerned that Comcast and NBCUniversal may be promoting invidious forms of DEI in a manner that does not comply with FCC regulations." As support for his concern, Carr pointed to Comcast stating on its website that promoting DEI is "a core value of [their] business," as well as Comcast's claim to having a "DEI infrastructure." Carr boldly stated that "[d]espite the emergence of DEI initiatives in recent years, these forms of discrimination have long been condemned by America's civil rights laws" and that the FCC's goal is to "ensure that every entity the FCC regulates complies with the civil rights protections enshrined in the Communications Act and the agency's EEO rules, including by shutting down any programs that promote invidious forms of DEI discrimination."
The court found that these examples confirm that the provision's language is being enforced to restrict speech related to DEI across the private sector.
IV. Conclusion
The Trump Administration filed its notice of appeal on February 24, 2025. However, and in the meantime, this preliminary injunction temporarily halts the Termination, Certification, and Enforcement Threat Provisions and the Trump administration's efforts to dismantle DEI programs.
The policy and law surrounding DEI will continue to evolve over the next months and we will continue to monitor the developments and provide additional updates and client alerts as the law and backdrop continues to change. As always, we are here to help navigate this complex and shifting legal landscape.
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