Legal Alert: Three Critical Updates on Trump DEI Legal Challenges

Key implications of the February 21, 2025 injunction and what’s next for federal contractors, universities, and corporations 

For employers and contractors: The Maryland District Court’s February 21, 2025 injunction immediately pauses major provisions of Trump’s DEI executive orders – here’s how it impacts your organization. 

What’s Blocked (and What’s Not) 

The preliminary injunction halts enforcement of three contested provisions: 

1. Termination of Equity Grants 
   • Blocked: Pending appeal, federal agencies cannot cancel “equity-related” contracts/grants under J20 Order § 2(b)(i) 
   • Impact: $2.1B in active DEI grants (e.g., higher education training programs) remain protected. 
2. Mandatory DEI Certifications 
   • Paused: For now, contractors are not required to certify DEI programs comply with anti-discrimination laws (J21 Order § 3(b)(iv)). 
   • Relief: Avoids False Claims Act risks for existing diversity initiatives. 
3. Targeted Enforcement Plan 
   • Blocked: DOJ’s pending report identifying “up to nine” DEI investigations against large corporations/universities (J21 Order § 4(b)(iii)). 

Still Active: Non-DEI provisions, including merit-based hiring mandates for federal agencies. The preliminary injunction does not block the Attorney General “from preparing a report [containing specific steps or measures to deter DEI programs or principles that constitute illegal discrimination] pursuant to the J21 Order. However, it prevents the Attorney General from acting on any report recommendations.   

“The orders are unconstitutionally vague in defining ‘DEI-related’ activities.” – Judge Abelson

Three Immediate Action Items 

1. Audit Vulnerable Contracts: Review federally funded DEI programs paused since January. Resume activities covered by the injunction 
2. Audit Existing DEI Programs: Audit existing DEI programs to ensure alignment with federal civil rights laws. Avoid efforts that exclude specific groups.  
3. Implement Periodic Risk Assessments: Perform periodic non-discrimination analysis. Analyzing workplace or organizational decisions will help proactively uncover any risks associated with Title VII.  

What’s Next: Timeline to Watch 

Affirmative Action, DEI, and Non-Discrimination in Employment Webinar

If you are looking for more information on what your organization should be doing today, watch our "What's the Difference? DEI, Affirmative Action, and Non-Discrimination in Employment" webinar. OutSolve CEO, Jeremy Mancheski, breaks down those three terms, what they mean in today's political climate, and offers actional insights and practical steps you can take today to ensure compliance.