On March 14, the Fourth Circuit stayed a preliminary injunction that had prohibited President Trump’s administration and federal agencies from implementing Executive Orders 14151 and 14173 (“DEI Executive Orders”). This means the Trump administration can proceed with implementing the DEI Executive Orders pending ongoing litigation. In this blog, we discuss what federal contractors should take away from the Fourth Circuit’s order.
Executive Orders 14173 and 14151 are the primary mechanisms President Trump has used to wind down certain Diversity, Equity, Inclusion, and Accessibility (“DEI” or “DEIA”) programs within the federal government and related to its work. Notably, these Executive Orders led to the termination of DEI contracts with agencies and prohibited federal contractors and grant recipients from engaging in “illegal DEI”.
On February 21, the District Court for the District of Maryland issued a preliminary injunction in National Association of Diversity Officers in Higher Education v. Trump. A preliminary injunction is a court order that prevents a litigant from carrying out conduct that is the basis of litigation pending a final order of the court in that same litigation. By issuing this injunction, the District Court prohibited federal agencies from enforcing the DEI Executive Orders. Central to this injunction was the court’s determination that the plaintiffs were likely to succeed in showing that the DEI Executive Orders violate both the First and Fifth Amendments of the Constitution.
On appeal, the Fourth Circuit found that the Trump administration was sufficiently likely to succeed on the merits to set aside the District Court’s injunction. Crucial to this decision, was the Trump administration’s representation that the DEI Executive Orders were of “distinctly limited scope.” Two judges adopted this representation, leading the Fourth Circuit to find that the orders’ enforcement, certification, and termination policies if solely used against DEI policies that violate federal anti-discrimination laws, are not facially violative of the First or Fifth Amendments.
The Fourth Circuit clarified that if the Trump administration seeks to penalize contractors for having programs that simply highlight the value of minorities in the workplace, such penalties “may well raise serious First Amendment and Due Process concerns.” However, contractors are still left to speculate what types of policies and programs the administration considers to be “illegal DEI” and violative of federal anti-discrimination laws given its outspoken criticism of certain Title VII protections.
Although the Trump administration may now enforce the DEI Executive orders, the Trump administration may only enforce the Executive Orders when contractors’ DEI programs violate federal antidiscrimination laws. Contractors should review our earlier blog on Executive Order 14173 to ensure compliance with the administration’s rules. Primarily, contractors should evaluate their policies and procedures for hiring, promotion, and retention for federal law compliance and carefully review the certification required by an agency.
PilieroMazza’s Labor and Employment attorneys are closely monitoring these issues and will update contractors as litigation over these Executive Orders develops. If you have questions about how President Trump’s Executive Orders or the Fourth Circuit’s stay impacts your contract, please contact Sarah Nash or Nichole Atallah. Also, please visit our Government Contract Executive Orders resource center for additional coverage.
