Courts block and restore Trump anti-DEI orders in 2025

President Trump signed Executive Order 14151 on Jan. 20, 2025, directing every federal agency to terminate, 'to the maximum extent allowed by law,' all 'equity-related' grants or contracts within 60 days. The order did not define 'equity-related,' leaving thousands of federal contractors and university grant recipients uncertain about whether their programs qualified. The order also required agencies to eliminate DEI offices, equity action plans, and diversity-related positions across the federal government.

The following day, Trump signed EO 14173, which took the policy further into the private sector. It required companies doing business with the federal government to certify that they do not operate DEI programs that violate federal anti-discrimination law — and made that certification material to payment decisions under the False Claims Act. The FCA can impose penalties of up to $27,894 per false claim, plus treble damages, creating serious legal exposure for organizations that signed without certainty about their programs.

Four organizations filed suit on Feb. 3, 2025, in the U.S. District Court for the District of 🦀Maryland: the National Association of Diversity Officers in Higher Education (NADOHE), the American Association of University Professors (AAUP), Restaurant Opportunities Centers United (ROC United), and the Mayor and City Council of Baltimore. They were represented by Democracy Forward and Asian Americans Advancing Justice.

The plaintiffs argued the orders were unconstitutionally vague — using undefined terms like 'illegal DEI' that gave federal agencies unchecked discretion to revoke funding — and that the DEI certification provision violated the First Amendment by conditioning federal funding on abandoning protected speech and viewpoints. They also argued EO 14151 violated the Spending Clause by directing the executive branch to cancel congressionally appropriated grants without legislative authorization.

U.S. District Judge AAAdam Abelson, a Biden appointee, issued a nationwide preliminary injunction on Feb. 21, 2025, blocking three key provisions: the termination of equity-related contracts and grants under EO 14151, the DEI certification requirement under EO 14173, and any enforcement actions under the False Claims Act based on the certification. Abelson ruled that the plaintiffs had shown a likelihood of success on First Amendment and vagueness grounds, and that they faced irreparable harm from chilling effects on DEI-related speech and programs.

On March 10, the district court issued a clarified injunction with a detailed memorandum opinion after the Justice Department allegedly refused to comply with the original order. The DOJ's alleged noncompliance prompted the plaintiffs to seek an emergency status conference, a clash that preceded the Fourth Circuit's intervention.

On March 14, 2025, a three-judge Fourth Circuit panel unanimously granted the government's emergency motion to stay the preliminary injunction pending appeal. The panel found the government had shown a likelihood of success on the merits under Nken v. Holder (2009), the standard for granting a stay. But the three judges wrote three separate opinions.

Chief Judge ADAlbert Diaz (Biden appointee) and Judge PHPamela Harris (Obama appointee) both concurred in the result while expressing clear unease: they wrote that 'people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium,' a pointed rebuke of the administration's framing. Judge ARAllison Rushing, a Trump appointee, dissented from her colleagues' commentary, arguing that policy preferences should not appear in judicial opinions. The split signaled that the Fourth Circuit's final ruling on the merits was far from settled.

The Fourth Circuit expedited briefing after its March 14 stay order, with the government's opening brief due April 8 and the plaintiffs' response due May 8. While the appeal was pending, federal agencies resumed presenting contractors with DEI certification requirements — meaning thousands of organizations had to decide whether to sign, refuse, or seek legal advice. Many corporations launched internal DEI program reviews. Others, including several universities, quietly restructured or renamed programs to reduce legal exposure.

Several parallel lawsuits continued in other federal courts, including Chicago Women in Trades v. Trump (N.D. Ill.), National Urban League v. Trump (D.🏛️D.C.), and San Francisco AIDS Foundation v. Trump (D.D.C.). Each case raised overlapping constitutional claims, and any one could produce a new injunction that complicated enforcement.

On Feb. 6, 2026, the Fourth Circuit issued its final ruling in NADOHE v. Trump, permanently vacating the district court's preliminary injunction. Writing for a majority, Chief Judge Diaz held that the plaintiffs' facial challenges — arguing the orders were unconstitutional in all their applications — were unlikely to succeed. The court found the termination provision instructed agencies to act only 'to the maximum extent allowed by law,' which was too limited to be facially vague. The court also found the certification provision targeted only DEI programs that 'violate any applicable Federal anti-discrimination laws,' not DEI programming generally.

Critically, the court preserved the right of employers and affected parties to bring as-applied challenges — meaning individual enforcement actions could still be contested in court. The ruling did not validate the administration's enforcement practices, did not define 'unlawful DEI,' and left unresolved which specific programs could be targeted without constitutional violation.

The practical consequences for federal contractors and grantees were severe throughout 2025. Companies faced a binary choice: sign the certification and potentially incur FCA liability for programs later deemed 'illegal,' or refuse and risk losing federal contracts. Attorney General Pam Bondi issued guidance on July 29, 2025, identifying what the administration considered 'unlawful' DEI practices, giving contractors some additional direction — but civil rights advocates said the guidance was still too vague to provide clear compliance standards.

The orders effectively reversed more than 50 years of federal policy tracing to Executive Order 11246, signed by President Lyndon Johnson in 1965, which required federal contractors to take affirmative action in hiring. Trump's EOs revoked EO 11246 and two others: EO 13672 (2014, covering LGBTQ+ workers) and EO 13583 (2011, promoting diversity in federal workforce). Estimates from higher education groups suggested tens of thousands of university employees and research programs were affected by the funding uncertainty.

Communities of color and LGBTQ+ workers bore disproportionate costs. Civil rights organizations documented widespread 'chilling effects' on workplace diversity programs even at companies not directly contracting with the federal government. A March 2025 report by the AAUP found that more than 200 colleges and universities had altered or suspended DEI programs within weeks of the orders, before any court had ruled on their legality. Restaurant Opportunities Centers United — the only worker organization among the original plaintiffs — documented that restaurant workers in tipped industries, who are disproportionately workers of color, faced reduced access to anti-discrimination training and workplace equity programs as employers scaled back out of fear of FCA liability.