President Trump issued Executive Orders (EOs) 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) and 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity), on January 20 and 21, 2025, laying out a plan for eradicating “illegal DEI” programs, including diversity, equity, and inclusion (DEI) initiatives by private employers and affirmative action plans of government contractors.
Within two weeks after the issuance of those two EOs, federal courts in Washington and Maryland issued orders restraining the enforcement of certain provisions of the EOs, on grounds of vagueness, fair notice, and freedom of speech.[1] On February 28, the Washington court converted its nationwide temporary restraining order to a preliminary injunction covering only 4 states: Colorado, Minnesota, Oregon and Washington.[2] The Maryland court’s nationwide preliminary injunction still stands. Just yesterday (March 3) the Maryland court issued an order refusing to stay its injunction while the government appeals to the Fourth Circuit Court of Appeals to overturn the injunction.[3] It is expected that the administration will issue additional guidance in short order, attempting to remedy some or all of the deficiencies underlying the injunctions, which may nor may not provide relief or greater clarity to employers. Meanwhile, the provisions of the EOs that were not enjoined remain in full force and effect.
Obviously, this is a rapidly evolving situation. So, should we do anything now, or wait?
Does your organization need to update its DEI initiatives and stop affirmative action plans?
Yes! But don’t panic. If your organization is subject to federal anti-discrimination laws[4] and has not already done so, it needs to update its DEI statements, policies, and programs now – not necessarily to abandon them, but to strengthen their focus and tidy up commonly used loose language that could increase the risk of unnecessary disputes.
And, if your organization is a federal government contractor, April 20 is its deadline for stopping all affirmative action programs previously required for federal government contracting. This obligation was not enjoined by the injunction issued February 21, 2025.
What has changed with respect to DEI programs and AA plans since January 20, 2025?
Most DEI programs are compliant with existing anti-discrimination law, which has not changed. So, what has changed? Here’s what the EOs changed (among other things):
- Executive Order 14173 directed federal agencies to root out DEI from public and private employment:
- (Section 2) directed all federal executive departments and agencies to “enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities” (Agency enforcement actions under this provision are currently enjoined nationwide by order of the Federal District Court for the District of Maryland);
- (Section 4) directed all federal executive departments and agencies to “take all appropriate action” to “advance in the private sector the policy of individual initiative, excellence and hard work identified in section 2 of this order”; and
- (Section 4) deputized the US Attorney General to submit a report containing recommendations “for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI,” with specific directives to identify key sectors of concern and the “most egregious DEI practitioners in each sector”; for each agency to “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”; and to suggest to the administration investigations, litigation, and regulatory actions;
- Executive Order 14173 changed contracting requirements for federal government contractors (Section 3):
- Revoked the affirmative action requirement for federal contractors and other nondiscrimination requirements under Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity), giving federal contractors a grace period of 90 days (i.e., until April 20, 2025) to dismantle their compliance with EO 11246; and,
- Ordered every federal government contract to be revised to require the contracting party “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws” and to make compliance with those laws material to the government’s payment decision, leveraging the enforcement tools of the False Claims Act, which allows lawsuits to be brought by private citizens (including disgruntled employees) for the benefit of the government and be awarded a bounty on the recovery. (The certification requirement, contract revisions, and False Claims Act enforcement under the EO currently are enjoined nationwide by order of the Federal District Court for the District of Maryland, at least for the named parties – a motion for clarification has been filed to determine whether the injunction applies to all agency requests for certification or just those directed to the named parties); and,
- Executive Order 14151 ended diversity, equity, inclusion, and accessibility initiatives of government agencies and programs, including ordering the termination of all “equity-related” government grants and contracts within 60 days (This provision is currently enjoined nationwide by order of the Federal District Court for the District of Maryland).
Although several provisions of these Executive Orders have been temporarily enjoined nationwide by a federal district court (1:25-cv-00333-ABA (D. Md. Feb. 21, 2025)) (enjoined provisions are noted in italics above), the injunction does not negate or otherwise affect:
- The requirement for federal contractors to end affirmative action programs by April 20, 2025;
- The directive to the Attorney General to prepare reports and conduct investigations into “illegal DEI” programs;
- Enforcement actions by federal agencies such as the Equal Employment Opportunity Commission (EEOC) under their existing authority (not under EO 14173); and
- Individual EEOC charges and lawsuits based on “Illegal DEI.”
The administration has neither defined the term “illegal DEI” nor provided specific guidance regarding the practices it intends to target with enforcement actions (other than “affirmative action” and “preferences”). However, employers may take steps to mitigate the risk of litigation or adverse regulatory action.
Action Steps to Take Now
- All employers covered by federal anti-discrimination laws need to review their EEO initiatives for compliance and clarity. Here are some priority focus areas:
- Eliminate affirmative action plans and programs (except those required by state or local regulations), quotas, preferences, set-asides, and programs and benefits for which inclusion or exclusion is based on protected status;
- Review DEI positions and functions, DEI-related goals and targets, diverse slates, supplier diversity programs, employee resource groups (ERGs), targeted mentoring and training programs, participation in external surveys, corporate sponsorships, and other DEI-focused programs, which are neither per se legal nor illegal (depending on how the programs are published and operate);
- Strengthen and clarify EEO language in contract terms, public filings, ESG statements, DEI statements, ERG information and documents, recruiting materials, websites, codes of ethics, and employment handbooks; and,
- Review and ensure purposeful and compliant EEO data collection and reporting.
- Federal government contractors:
- If the organization is subject to state or local government contracting regulations, determine their specific requirements (about half of the states have their own affirmative action and reporting requirements that remain in effect[5]);
- Cease all affirmative action plans and programs, except those required for compliance with state or local government regulations;
- Watch for agency and contractor inquiries regarding DEI-related contract terms and seek counsel regarding responding (even to informal inquiries), as these can result in False Claims Act liability regardless of the outcome of the ongoing litigation regarding the certification requirement; and
- Take steps to be positioned to make certifications if and when required.
Bottom line:
Federal anti-discrimination statutes and regulations have not changed. Federal agencies’ interpretations of the statutes and regulations have changed, along with their enforcement focuses and resources.
Morningstar Law Group can help your organization update its statements and programs for compliance with the law while mitigating against the risk of enforcement proceedings and lawsuits. Based on our understanding of the law, published materials and statements by the administration, ongoing litigation regarding the EOs, and historical trends, we have a strong understanding of the risk areas that employers need to focus on for compliance and risk avoidance.
[1] Mem. Op., PFLAG, Inc. et al. v. Trump et al., Civ. No. 25-337-BAH (D. Md. Feb. 14, 2025); Washington et al. v. Trump et al., No. 2:25-cv-244-LK (W.D. Wash.), ECF No. 158 (Feb. 14, 2025).
[2] Order Granting in Part and Denying in Part Motion for Preliminary Injunction, Washington et al. v. Trump et al., No. 2:25‑cv‑244-LK (W.D. Wash.) (Feb. 28, 2025).
[3] The Trump administration has appealed to the United States Court of Appeals for the Fourth Circuit to overturn the injunction, with briefing due April 8 and May 8. On March 3, the Maryland District Court refused to stay the injunction pending appeal.
[4] Most organizations with 15 or more employees are subject to federal anti-discrimination laws, including Title VII of the Civil Rights Act, and the Americans with Disabilities Act. Organizations with 1 or more employees are subject to the Equal Pay Act. Contact us if you have questions about what laws apply to your organization.
[5] If your organization is both a state or local government contractor and a federal contractor and faces conflicting requirements, your organization should seek counsel regarding navigating that scenario.
