Alert 01.28.25
Trump Administration Executive Orders Take Aim at DEI in Government and Private Sector
Executive orders will have dramatic impact on federal agencies, contractors, and grantees, and sow uncertainty about voluntary DEI initiatives.
Alert
02.24.25
On February 21, 2025, a federal court in Baltimore, Md., issued a nationwide preliminary injunction order against aspects of two Executive Orders that targeted diversity, equity, and inclusion (DEI) principles and programs in the private sector (the Anti-DEI EOs). The ruling came in a lawsuit filed by lead plaintiff the National Coalition of Diversity Officers in Higher Education (NADOHE).[1] As explained in this Pillsbury client alert, the Anti-DEI EOs signed by President Trump on January 20 and 21, 2025, include directions to federal agencies to:
In NADOHE v. Trump, the plaintiffs asserted that these measures were unconstitutional. The plaintiffs contended that the Certification and Termination Provisions violate the separation of powers principles of the Constitution; that the Termination and Enforcement Threat Provisions are unconstitutionally vague under the Fifth Amendment’s Due Process Clause; and that the Certification and the Enforcement Threat Provisions impermissibly restrict and chill the plaintiffs’ speech based on content and viewpoint, in violation of the First Amendment.
In ruling on the plaintiffs’ motion, the court first found that each plaintiff had adequately established standing to sue based on injuries directly traceable to the Anti-DEI EOs, either to the plaintiffs directly because the provisions of the Anti-DEI EOs “directly affected and interfered with [their] core business activities” and/or through associational standing, by demonstrating that one of more of the association plaintiffs’ members had suffered or would suffer harm.
The court held that the plaintiffs were likely to succeed on the merits of their Due Process and First Amendment claims with respect to the three challenged provisions of the Anti-DEI EOs. Observing that “ensuring equity, diversity, and inclusion has long been a goal, and at least in some contexts arguably a requirement, of federal anti-discrimination law” and that “efforts to foster inclusion have been widespread and uncontroversially legal for decades,” the court held that the Enforcement Threat Provision’s effort to “expressly targe[t], and threate[n], the expression of views supportive of equity, diversity and inclusion” constituted “textbook viewpoint-based discrimination.”
Enjoined Provisions
With respect to the Certification Provision, the court stated that
Plaintiffs, their members, and other federal contractors and grantees have shown they are unable to know which of their DEI programs (if any) violate federal anti-discrimination laws, and are highly likely to chill their own speech—to self-censor, and reasonably so—because of the Certification Provision. Indeed, the Certification Provision was likely designed to induce, and certainly has been shown to have the effect of inducing, federal contractors and grantees to apply an overinclusive definition of illegal DEI to avoid risking liability. This is exactly what [prior Supreme Court decisions] prohibi[t]—the government leveraging its funding to restrict federal contractors and grantees from otherwise exercising their First Amendment rights outside the scope of the federal funding.
The court held that both the Certification Provision and the Enforcement Threat Provision “squarely, unconstitutionally, abridge the freedom of speech” that is protected under the First Amendment. With respect to the Termination Provision, the court held that “the term ‘equity-related’ grants or contracts invites arbitrary and discriminatory enforcement … over billions of dollars in government funding” and “offers insufficient notice to current grantees about whether and how they can adapt their conduct to avoid termination of their grants or contracts.” Offering a variety of hypothetical examples, such as the use of federally funded computers to teach the history of Jim Crow laws, the court expressed that the possibilities for agencies to treat “equity-related” activities as prohibited “are almost endless, and many are pernicious.” Accordingly, the court ruled that the Termination Provision was likely unconstitutionally vague in violation of the Fifth Amendment’s Due Process Clause. Because the Due Process and First Amendment claims provided a sufficient basis for the court to issue a preliminary injunction against the three challenged provisions of the Anti-DEI EOs, the court stated that it did not “decide one way or the other” with respect to the plaintiffs’ separation of powers claims.
Having concluded that the plaintiffs would likely succeed on the merits of their claims, the court also found that the plaintiffs had established they would suffer “irreparable harm” in the absence of an injunction:
the problem is … that the Challenged Provisions strip Plaintiffs of the ability to know what the government might now consider lawful or unlawful. There have been 60 years of statutes, regulations, and case law developed since the Civil Rights Act of 1964. The Challenged Provisions strip away much of the prior executive branch guidance, and then threaten the loss or condition the receipt of federal funds, and also threaten civil enforcement actions—some backed by the possibility of treble damages—for violations. And in so doing, they threaten to punish prior expressions of protected speech, and chill future expressions of protected speech.
Preliminary Injunction
The court’s preliminary injunction order provides that the Trump Administration defendants and “other persons who are in active concert or participation” with the defendants shall not, with respect to the plaintiffs or anyone else:
The court’s injunction did not extend to any other aspect of the Anti-DEI EOs, such as measures with respect to the federal workforce. The court also denied the plaintiffs’ motion to the extent that it sought to enjoin the Attorney General from preparing a report of investigation targets or engaging in investigations, preliminary to bringing an enforcement action.
The Government has the right to promptly appeal the preliminary injunction; in that event, the U.S. Court of Appeals for the Fourth Circuit could lift the injunction prior to ruling on the appeal or could leave it in place.
Department of Education “Dear Colleague” Letter Creates Continued Uncertainty for Educational Institutions
For many organizations, the NADOHE v. Trump preliminary injunction provides at least a temporary period of relief from enforcement fears about DEI programs. However, educational institutions that receive federal funding still face heightened risks and uncertainty as a result of the “Dear Colleague” letter (DCL) issued on February 14, 2025, by the Acting Assistant Secretary for Civil Rights for the Department of Education (the Department). The DCL warned schools that many DEI policies may constitute unlawful racial discrimination and jeopardize the institutions’ federal funding. Unlike memoranda and guidance from other agencies that expressly state they have been issued to implement the Anti-DEI EOs, the DCL includes no mention of the Anti-DEI EOs. Instead, the DCL states that it functions as guidance on the Trump Administration’s interpretation of Title VI of the Civil Rights Act of 1964 and the Equal Protection Clause of the U.S. Constitution. While acknowledging that the DCL does not have “the force and effect of law,” the Department warns in the DCL that it intends to begin conducting compliance assessments no later than February 28, 2025, to ensure institutions adhere to the DCL’s interpretation of federal antidiscrimination law, as a condition to the receipt of federal funding.
The DCL asserts that educational institutions have embraced “pervasive and repugnant” race-based preferences and other forms of racial discrimination by using race as a factor in various aspects of institutional programming. The DCL further criticizes educational institutions for “toxically indoctrinat[ing] students with the false premise that the United States is built upon ‘systemic and structural racism’ and advanced discriminatory policies and practices.” The DCL accuses educational institutions of using DEI programs to “smuggl[e] racial stereotypes and explicit race-consciousness into everyday training, programming, and discipline.”
While the DCL purports to rely on existing 2023 Supreme Court precedent, Students for Fair Admissions, Inc. v. President and Fellows of Harvard College and Students for Fair Admissions, Inc. v. University of North Carolina (collectively, SFFA), the DCL goes beyond the holding in SFFA. The Supreme Court expressly limited its SFFA holding to “whether a university may make admissions decisions that turn on an applicant’s race.” The SFFA decision recognized that the goal of diversity on college and university campuses is “commendable” and “worthy,” but ended prior legal permission to achieve that goal through using race as a factor in admissions decisions. The DCL extends this holding to assert that educational institutions may not “us[e] race in decisions” in any aspect of academic and campus life.
For example, the DCL asserts that even programs that are “neutral on their face” are impermissible, if “motivated by racial considerations,” stating that eliminating standardized testing to achieve an increase in racial diversity is unlawful. This is contrary to a 2023 decision by the U.S. Court of Appeals for the Fourth Circuit, which upheld the legality of such race-neutral admissions criteria. In Coalition for TJ v. Fairfax County School Board, the court held that eliminating standardized tests and implementing alternative admissions criteria, such as considering socioeconomic factors, did not constitute racial discrimination, even if the changes to admissions standards were adopted by the School Board “to improve racial diversity and inclusion” and with an expectation that the measures would increase the rates of enrollment of underrepresented racial and ethnic minority students. Notably, in 2024, the Supreme Court denied a petition to review this case, allowing the Fourth Circuit’s decision to stand.
Department of Education Directives to Schools
Based on the Department’s interpretation of DEI programs as unlawfully discriminatory, the DCL advises “all education institutions” to:
The DCL encourages individuals to report non-compliance through the Department’s Office for Civil Rights complaint system. The DCL warns that “[i]nstitutions that fail to comply with federal civil rights law may, consistent with applicable law, face potential loss of federal funding.”
Questions About Enforcement Methods and DCL Authorities
As of the date of this alert, the Department has not provided updated guidance to indicate whether it will modify the DCL or refrain from any enforcement activities relating to DEI in light of the court’s ruling in NADOHE v. Trump. It is also unclear from the DCL what mechanism would be used to enforce the threatened loss of federal funding in the event that the Department contends that any specific DEI programs violate Title VI. To the extent that the authority for termination of federal funding is based on the Anti-DEI EOs, the NADOHE v. Trump preliminary injunction would prohibit that enforcement action. To the extent the Department would seek to eliminate funding under existing Title VI regulations and procedures, educational institutions should have the opportunity to mediate the claim or negotiate a voluntary resolution agreement prior to the conclusion of an investigation. Additionally, even if the Department found evidence of a Title VI violation, OCR’s Case Processing Manual requires the Department to negotiate a resolution agreement and issue a letter of findings. Only if those negotiations are unsuccessful can the Department either initiate administrative proceedings to suspend or terminate federal funding or refer the case to the Department of Justice. These procedures require many stages of notice, attempted conciliation, and mandatory time periods before further agency action can be taken. Thus, while it is possible that, despite the injunction, the Department could seek to rely on its existing Title VI enforcement authority to target DEI initiatives, existing Title VI procedures would act as a check on the Department unilaterally and quickly cutting off federal funding.
Conclusion
Neither the NADOHE v. Trump preliminary injunction nor the Department of Education’s DCL guidance is likely to mark the end of further efforts by the Trump Administration to deter DEI initiatives in the private sector or at educational institutions. Pillsbury will continue to monitor these developments. Institutions and organizations with questions about the lawfulness of their DEI programs should consult with legal counsel for individualized advice about compliance and risks.
[1] DEI programs often include measures to support inclusion and belonging for members of the LGBTQ+ community, including individuals who identify as transgender or nonbinary. An Executive Order titled “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” was signed by President Trump on January 20, 2025 (the Gender Ideology EO). That order declares a federal policy that “sex” is an “immutable biological classification as either male or female” and, among other provisions, mandates that any federally issued identification documents “reflect solely the holder’s sex assigned at birth.” On February 19, 2025, a separate lawsuit, National Urban League v. Trump, was filed in federal court in the District of Columbia, challenging the Anti-DEI EOs and the Gender Ideology EO as unconstitutional.