Fourth Circuit Stays Injunction of Trump DEI Executive Orders

On March 14, 2025, a three-judge panel on the U.S. Court of Appeals for the Fourth Circuit stayed the nationwide preliminary injunction of President Trump’s Executive Orders 14173 and 14151 (DEI EOs). As we previously reported, a federal district court in Maryland enjoined three parts of the DEI EOs:

• The requirement that federal contractors and grantees certify that they do not operate “illegal” DEI programs and comply with federal discrimination laws for purposes of the False Claims Act (FCA);
• A provision directing the U.S. Attorney General to target what the administration believes are “illegal” DEI programs in the private sector; and
• The requirement that federal agencies terminate “equity-related grants or contracts.”

The Fourth Circuit’s decision stays that injunction and allows the Trump administration to continue with the DEI EOs while the case proceeds. Although this is not a final decision on the merits, companies should prepare for the Trump administration to move expeditiously to implement the DEI EOs while the stay is in place. 

Fourth Circuit Decision

The Fourth Circuit held that the government had satisfied the standards to stay the preliminary injunction while the case proceeds. The Fourth Circuit found that the government has demonstrated a likelihood of success on the merits of its appeals, but the judges appear to disagree on whether the administration’s enforcement of the DEI executive orders would be constitutional. 

Each judge on the panel authored a separate concurring opinion.

• Chief Judge Albert Diaz: Judge Diaz criticized how the DEI EOs appear to be seeking to eliminate all DEI programs because they did not define DEI or its components. Judge Diaz wrote:
  
  And despite the vitriol now being heaped on DEI, people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium. For when this country embraces true diversity, it acknowledges and respects the social identity of its people. When it fosters true equity, it opens opportunities and ensures a level playing field for all. And when its policies are truly inclusive, it creates an environment and culture where everyone is respected and valued. What could be more American than that?

• Judge Pamela Harris: Judge Harris found that the DEI EOs are limited in scope, do not outlaw all DEI programs, and only apply to conduct that violates existing federal anti-discrimination law.  She also found that the termination of grants under EO 14151 is based on grant-funding activity—not the grantee’s speech or activities outside the scope of funded activities. Judge Harris, however, noted that:
  
  [M]y vote to grant the stay comes with a caveat. What the Orders say on their face and how they are enforced are two different things. Agency enforcement actions that go beyond the Orders’ narrow scope may well raise serious First Amendment and Due Process concerns, for the reasons cogently explained by the district court.
  
  . . .
  
  Finally, my vote should not be understood as agreement with the Orders’ attack on efforts to promote diversity, equity, and inclusion. In my view, like Chief Judge Diaz’s, ‘people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium.’
• Judge Allison Rushing: Judge Rushing criticized the injunction as being overly broad because it aims to prevent “nondefendants from taking action against nonplaintiffs.” She also questioned whether the challenge is ripe given that there was no challenged agency action enforcing the DEI EOs. Judge Rushing appeared to caution judges considering whether DEI programs are good policies when ruling on this case, saying:
  
  We must not lose sight of the boundaries of our constitutional role and the imperative of judicial impartiality. Any individual judge’s view on whether certain Executive action is good policy is not only irrelevant to fulfilling our duty to adjudicate cases and controversies according to the law, it is an impermissible consideration. A judge’s opinion that DEI programs “deserve praise, not opprobrium” should play absolutely no part in deciding this case.

Finally, my vote should not be understood as agreement with the Orders’ attack on efforts to promote diversity, equity, and inclusion. In my view, like Chief Judge Diaz’s, ‘people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium.’

We must not lose sight of the boundaries of our constitutional role and the imperative of judicial impartiality. Any individual judge’s view on whether certain Executive action is good policy is not only irrelevant to fulfilling our duty to adjudicate cases and controversies according to the law, it is an impermissible consideration. A judge’s opinion that DEI programs “deserve praise, not opprobrium” should play absolutely no part in deciding this case.

The Fourth Circuit ordered expedited briefing on the merits of the preliminary injunction. The government’s opening brief is due by April 8, 2025.  The plaintiffs’ response brief is due by May 8, 2025.

Implications of the Fourth Circuit’s Decision

The Fourth Circuit’s stay of the injunction allows the Trump administration to move forward with enforcing the three provisions that were enjoined. So, for now, the government can:

• Require federal contractors and grantees to certify that they: (1) do not operate DEI programs that violate federal anti-discrimination laws; and (2) comply “in all respects with all applicable Federal anti-discrimination laws” and that such compliance “is material to the government’s payment decisions” for purposes of the FCA;
• Terminate “equity-related” government contracts and grants; and
• Continue efforts to target what this administration believes to be “illegal” DEI programs in the private sector.

It is important to note that there are several other cases pending against the DEI EOs, including National Urban League et al. v. Trump et al., D.D.C. (Challenging EOs 14151, 14168, and 14173); Women in Trades v. Trump et al., N.D. Ill. (Challenging EOs 14151 and 14173); San Francisco AIDS Foundation et al. v. Trump et al., D.D.C., Case No. 25-cv-1824 (Challenging EOs 14151, 14168, and 14173). Courts in these cases may issue their own injunctions over all or parts of the DEI EOs. 

In the meantime, companies should consider following the recommended mitigation steps that we discussed in a previous alert. One of the most critical items is to inventory and audit existing and proposed DEI programs and policies under attorney-client privilege. This includes reviewing all public-facing DEI communications and disclosures (e.g., SEC filings, websites, recruiting materials, and messaging to employees) to ensure that they are vetted appropriately based on the company’s risk tolerances and preferences. At the same time, companies that eliminate DEI programs or excessively curtail them can create legal, business, and reputational risks. The outcome of these audits can be used to inform the companies’ DEI strategies moving forward based on risk tolerances and preferences. These audits are even more critical for federal contractors so they can certify the lawfulness of their DEI programs to the government when the new contractual certification requirements are added to their federal contracts.
Our DEI Strategy + Defense Task Force helps companies navigate these difficult issues through our privileged DEI risk audits. Learn more about these audits