On February 21, the Maryland District Court issued an injunction prohibiting the administration from implementing requirements in Executive Order (EO) 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, and EO 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity.

While this decision, which is lengthy and includes some compelling arguments, is just the first round in the legal battle over the recent diversity, equity and inclusion (DEI)-related mandates, it has practical implications for contractors.

The Decision

The court held the plaintiffs were likely to succeed on the merits of their arguments that the president’s directions regarding these three DEI-related requirements were improper:

• Terminate DEI-related federal agreements (Termination Provision).
• The imposition of a certification requirement in federal agreements that the counterparty does not operate any programs promoting DEI that violate applicable federal anti-discrimination law (Certification Provision).
• The Attorney General takes measures to encourage the private sector to end “illegal discrimination and preferences, including DEI” (Enforcement Threat Provision).

For that reason, coupled with the court’s conclusion that the plaintiffs would suffer irreparable harm were an injunction not issued, the balance of equities and public interest weighing in the plaintiffs’ favor, the court issued a preliminary injunction applicable to both the plaintiffs and to similarly situated nonparties nationwide.

The court concluded that the Termination and Enforcement Threat Provisions are “unconstitutionally vague as to all contractors and grantees who are subject to them, and the Certification and Enforcement Threat Provisions are content- and viewpoint-based restrictions that chill speech as to anyone the government might conceivably choose to accuse of engaging in speech about ‘equity’ or ‘diversity’ or ‘DEI’. . . .” 

Going Forward

While the government may well challenge the injunction, the pause on enforcement should give the government time to issue additional guidance as to what DEI program features it views as violative of federal anti-discrimination law and give contractors time to fully evaluate, hopefully with the benefit of that additional guidance, what adjustments to internal processes may be necessary.

For the time being, grant recipients and contractors should carefully consider rejecting DEI-related certification requests from the government or high-tier contractors/grant recipients, until additional guidance is provided.

For further information about the new DEI requirements please consult our blog. We have written extensively on the EOs, DOJ memo clarifying the administration’s position, and the FAR class deviations implementing change to affirmative action obligations.

Please contact the author if you have any questions about how this injunction will affect your business.