Developments Regarding Executive Orders Challenging DEI Programs
As we previously reported, last month the Trump administration issued a series of Executive Orders (“EOs”) aimed at challenging Diversity, Equity, and Inclusion (“DEI”) initiatives within the federal government and, to some extent, the private sector. These EOs focus on “illegal DEI” programs and initiatives that the EOs say fail to prioritize merit, skill, and individual performance. As summarized more fulsomely in the prior client alert, key directives in the EOs include revoking prior EOs related to DEI and affirmative action, directing government agencies to scrutinize and end so-called illegal DEI programs and preferences, and emphasizing a binary definition of sex. The EOs have sparked legal challenges, guidance and enforcement actions from state Attorneys General, as well as confusion among employers regarding their compliance obligations.
Where Are We Now?
The EOs are already subject to several legal challenges. Last week, the U.S. District Court for the District of Maryland issued a nationwide injunction related to specific provisions in two of the EOs summarized above: the Ending Radical and Wasteful Government DEI Programs and Preferencing Executive Order (the “Government DEI Programs Order”) and the Ending Illegal Discrimination and Restoring Merit-Based Opportunity Executive Order (the “Illegal Discrimination Order”). The Court granted a nationwide, preliminary injunction as to three provisions in the EOs: (1) the requirement that each government agency terminate all “equity-related” grants or contracts; (2) the requirement that every federal grant or contract include a certification that the recipient does not operate DEI programs that violate federal anti-discrimination laws and a certification that compliance with federal anti-discrimination laws is material to legally requesting payments from the government under the False Claims Act; and (3) the direction to the Attorney General to take appropriate measures to encourage the private sector to end illegal discrimination (including DEI), deter DEI programs, and identify potential civil compliance investigations regarding DEI. The Court granted the preliminary injunctions on the basis that the plaintiffs were likely to successfully demonstrate that these provisions were an impermissible restriction on free speech and unconstitutionally vague, as it is unclear what constitutes “illegal DEI”. Notably, the Court’s order does not prohibit the Attorney General from identifying a “plan of specific steps or measures to deter DEI programs or principles . . . that constitute illegal discrimination or preferences”, as the Court notes that this is “merely a directive from the President to the Attorney General”. Nor does it prohibit agencies from otherwise conducting investigations or bringing challenges to enforce the requirements of the federal anti-discrimination laws. On February 24, the Trump Administration appealed this order to the Court of Appeals for the Fourth Circuit.
Other litigation on the EOs is also underway. For example, last week the National Urban League filed suit in the District Court for the District of Columbia challenging the Government DEI Programs Order, the Illegal Discrimination Order, and The Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government Order, which detailed the binary definition of sex noted above.
Despite the Maryland court order, on Monday, America First Legal Foundation (“AFLF”), a non-profit organization founded by senior members of the Trump administration, sent a letter to the U.S. Department of Labor (“DOL”) requesting that the DOL investigate particular federal contractors (including Lyft, CBS, PWC, and Northwestern University) and claiming that their DEI policies violate existing federal law and the Illegal Discrimination Order. Notably, AFLF bases their allegations at least in part on public statements by the federal contractors regarding their DEI efforts.
State Government Responses to the EOs
State Attorneys General, who in many states are charged with enforcing state anti-discrimination laws, have issued joint letters in response to the EOs. These letters, in turn, scrutinize and support DEI initiatives.
On January 27, 2025, a group of Attorneys General for 11 states issued a Letter to six major financial companies threatening enforcement actions for allegedly allowing decisions related to DEI programs to potentially affect their fiduciary duties to shareholders (i.e., allegedly using race-based and sex-based quotas to promote diversity in hiring and contracting). The Letter warns that the companies may be facing state enforcement action because they “appear to have made business and investment decisions” related to the quotas that are politically motivated. At least one state Attorney General has followed through with litigation. The Missouri Attorney General’s Office filed a lawsuit against Starbucks on February 11, 2025, alleging that the company’s DEI programs serve as a pretext for unlawful discrimination.
On February 13, 2025, a coalition of Attorneys General for 16 other states, including New York, issued Guidance for businesses, nonprofits, and other organizations to clarify the legal status of DEI and DEIA initiatives in light of the EOs and resulting memoranda. The Guidance emphasizes their view of the legality of DEI and DEIA initiatives under federal, state, and local laws, as confirmed by long-standing court precedent, and warns of enforcement action for failing to implement legally required anti-discrimination policies and practices.
Next Steps for Employers
While there has been a flurry of Executive Orders, guidance, and litigation surrounding DEI over the past month, federal anti-discrimination laws remain the same. These laws, including Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, prohibit discrimination on the basis of legally protected characteristics and have been interpreted by the courts to permit DEI efforts that are carefully crafted to comply with Federal, state, and local anti-discrimination laws. However, the recent Executive Orders and Federal and certain state guidance indicate that private employers with DEI policies or practices may be subject to increased scrutiny. Indeed, a February 5 memoranda from the United States Attorney General (“AG”) (issued prior to the Maryland decision) indicates that a priority for the AG is “enforcing federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including policies relating to DEI and DEIA”.
Moreover, there has been a notable increase over the past year in private lawsuits challenging DEI-related practices. As a result, employers should consider working with counsel to conduct a privileged review of any policies or practices related to DEI to evaluate their potential exposure and opportunities for improvement. By proactively reviewing existing policies and practices, employers will be in a better position to mitigate legal risk while maintaining compliance and continuing to foster an inclusive work environment.
Employers with questions about the Executive Orders and their impact on their policies and practices should contact any attorney at the Firm.
DISCLAIMER: This alert is provided to clients and friends of the firm for informational purposes only and the distribution of this alert is not intended to, and does not, establish an attorney-client relationship. This alert also does not provide or offer legal advice or opinions on any specific factual situations or matters. This communication may be considered Attorney Advertising. Prior results do not guarantee a similar outcome.