On March 14, the U.S. Court of Appeals for the Fourth Circuit granted the government’s motion for a stay pending appeal, terminating a Maryland district court’s injunction of certain elements of President Trump’s January 20 and 21 diversity, equity and inclusion (DEI) executive orders (EO), “Ending Radical and Wasteful Government DEI Programs and Preferencing” and “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” We wrote about the district court’s injunction here and here.
Notably, the DEI EOs directed agencies to terminate DEI-related federal agreements and require certifications in federal agreements that the counterparty does not operate any programs promoting DEI that violate applicable federal anti-discrimination law. Additionally, the EOs directed the Attorney General to take measures to encourage the private sector to end “illegal discrimination and preferences, including DEI.”
The Fourth Circuit’s order found that the government “has satisfied the factors for a stay” without explaining the court’s rationale. The concurring opinions suggest that the executive orders themselves are not flatly unconstitutional and that while agencies could implement them in a manner that violates the First and/or Fifth Amendments, they have not plainly done so yet.
This frees up the administration to, among other actions, promulgate the two DEI grant and contract certification provisions required by the January 21 EO as well as terminate, where otherwise legally permissible, DEI-related contracts and grants. For contracts, we expect to see the DEI certification provisions promulgated by some agencies in FAR deviations as early as next week.
To the extent contractors and grant recipients have not already done so, we recommend reviewing DEI-related employment and sourcing practices, reviewing DEI training, and, to the extent necessary, recalibrating public-facing statements about DEI policies.
