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On March 14, 2025, the Court of Appeals for the Fourth Circuit lifted the preliminary injunction blocking key provisions of President Trump’s executive orders related to diversity, equity, and inclusion (our summary of the DEI EOs is here). This decision temporarily reinstates the enforcement of Executive Orders 14151 and 14173, pending further appellate review.

Background

As discussed here, on February 21, a Maryland district court issued a nationwide preliminary injunction, citing concerns that the EOs were likely to violate the First and Fifth Amendments by chilling free speech and due process. The preliminary injunction had blocked the federal government from forcing contractors and grantees to certify that they aren’t promoting “illegal DEI.”

The government defendants immediately filed a notice of appeal with the Fourth Circuit, while also seeking a stay of the district court’s preliminary injunction. On March 3, the district court denied their request for a stay with Judge Abelson concluding that the potential harm of the orders outweighed the administration’s policy priorities.

The Fourth Circuit’s Panel Decision

The three-judge appellate panel unanimously stayed the injunction on March 14, with all three judges writing separate concurrences. There is an undercurrent in each opinion that the injunction came too early (for it’s unclear still what types of programs the government will try to eliminate) to determine if the government’s actions will implicate the First and Fifth Amendment concerns raised by plaintiffs. Also, the court takes the government defendant’s representations that the EOs are distinctly limited in scope and apply only to conduct that violates existing federal anti-discrimination law as true.

  • Chief Judge Albert Diaz reserved judgment on how the administration enforces the executive orders and emphasized the importance of open discussion about DEI programs. He also opined, “despite the vitriol now being heaped on DEI, people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium.” 
  • Judge Pamela A. Harris and Judge Allison Jones Rushing raised concerns about the scope and enforcement of the executive orders. Judge Harris included, “[a]s the government explains, the challenged Executive Orders, on their face, are of distinctly limited scope.” And, Judge Rushing said, “t]he scope of the preliminary injunction alone should raise red flags: the district court purported to enjoin nondefendants from taking action against nonplaintiffs. purported to enjoin nondefendants from taking action against nonplaintiffs” and “this case does not challenge any particular agency action implementing the Executive Orders.”
  • Judge Harris concluded her decision noting, “[b]ut my vote to grant the stay comes with a caveat. What the Orders say on their face and how they are enforced are two different things. Agency enforcement actions that go beyond the Orders’ narrow scope may well raise serious First Amendment and Due Process concerns, for the reasons cogently explained by the district court.”

What’s Next

The ruling means that federal agencies can now resume actions such as terminating contracts and requiring certifications as specified in the DEI EOs, progressing compliance investigations, and terminating “equity-related” grants or contracts. 

Despite the stay, the appeal of the preliminary injunction remains pending in the Fourth Circuit. The appellate court has ordered expedited briefing for the full appeal, with the government’s opening brief due by April 8, 2025, and the plaintiffs’ response brief due by May 8, 2025.

In the meantime, we continue to recommend privileged DEI Health Checks to mitigate against the risk of claims, and consulting with counsel regarding agency requests for certification (in no small part since the potential consequences include possible exposure to claims under the False Claim Act). Please contact your Baker McKenzie employment lawyer for more.