Federal Contractor DEI Certifications Allowed to Resume After Fourth Circuit Temporarily Blocks District Court's Nationwide Injunction

Seyfarth Synopsis: On March 14, 2025, the Fourth Circuit reversed a lower court's nationwide injunction that blocked key portions of President Trump's January 2025 Executive Orders on DEI programs. While the appeal is pending, federal agencies can now resume presenting federal contractors and grantees with the certifications required under the Executive Orders, including certifications that contractors do not operate DEI programs violating federal anti-discrimination laws, opening the door to potential liability under the False Claims Act. The Fourth Circuit’s opinion also lifts the injunction’s restrictions against the government from bringing enforcement actions against contractors with allegedly discriminatory DEI programs.

The Fourth Circuit’s March 14 order in Nat’l Ass’n of Diversity Officers in Higher Educ. v. Trump, No. 25-1189, was a ruling on the government’s emergency request regarding the opinion and nationwide preliminary injunction issued on February 21, 2025 by Judge Adam B. Abelson of the U.S. District Court for the District of Maryland. We previously wrote about the preliminary injunction here. The district court’s nationwide injunction blocked multiple provisions of President Trump’s executive orders on DEI programs, and was based on a finding that the challenged provisions of the Executive Orders likely violated both the First Amendment's free speech protections and the Fifth Amendment's due process clause. Specifically, the district court held that the provisions were unconstitutionally vague, constituted content-based and viewpoint-discriminatory restrictions on protected speech, and improperly leveraged federal funding to regulate speech outside the scope of federal programs.

On March 14, 2025, a three-judge panel of the Fourth Circuit unanimously granted the government's request to stay the preliminary injunction pending appeal. The Fourth Circuit’s order simply stated the panel’s conclusion that the government had satisfied the relevant factors for a stay under Nken v. Holder, finding that the government demonstrated a likelihood of success on the merits of its appeal.

Each member of the three-judge panel published separate concurring opinions, revealing an ideological split despite their unanimous decision to grant the stay.

In their concurring opinions, both Chief Judge Albert Diaz (appointed by President Biden in 2023) and Judge Pamela Harris (appointed by President Obama in 2014) expressed clear reservations about the administration's anti-DEI agenda. Both Chief Judge Diaz’s and Judge Harris’ concurrences assert that “people of good faith who work to promote diversity, equity, and inclusion deserve praise, not opprobrium,” signaling their discomfort with the Orders’ underlying premise. Judge Harris’ concurrence specifically provided the caveat, “my vote should not be understood as agreement with the Orders’ attack on efforts to promote diversity, equity, and inclusion.”

Critically, Chief Judge Diaz and Judge Harris also warned that agency enforcement actions exceeding the Orders' facial limitations could raise serious First Amendment and Due Process concerns, signaling their potential receptiveness to future challenges. However, both judges voted to temporarily block the district court's nationwide injunction based on their assessment that the Executive Orders, as written on their face, do not violate the Constitution. Judge Harris explained that the Executive Orders have “distinctly limited scope” and “do not purport to establish the illegality of all efforts to advance diversity, equity or inclusion,” but rather apply only to “conduct that violates existing federal anti-discrimination law.” Chief Judge Diaz similarly noted that he was “satisfied for now that the government has met its burden justifying a stay,” emphasizing that his decision was based on the preliminary posture of the case where the Orders “only purport to direct executive policy and actors.”

In contrast, the concurrence of Judge Allison Rushing (appointed by President Trump in 2019) focused squarely on the procedural deficiencies in the district court's nationwide injunction, and sharply criticized the district court for enjoining “nondefendants from taking action against nonplaintiffs.”[1] She also questioned the plaintiffs' standing and the ripeness of the lawsuit, suggesting that challenges to the executive orders themselves were premature and that courts should wait for specific agency actions before intervening. Judge Rushing’s concurrence directly responds to her colleagues’ commentary on DEI, stating that “any individual judge's view on whether certain Executive action is good policy is not only irrelevant to fulfilling our duty to adjudicate cases and controversies according to the law, it is an impermissible consideration.” She emphasized that “[a] judge's opinion that DEI programs ‘deserve praise, not opprobrium’ should play absolutely no part in deciding this case.”

What the Fourth Circuit's Stay Means

 The stay issued by the Fourth Circuit restores the government's ability to enforce three key provisions that had been enjoined by the district court:

First, federal agencies may now implement the “Termination Provision” from EO 14151 that directs them to “terminate... all... 'equity-related' grants or contracts” within 60 days.

Second, federal agencies can now require contractors and grantees to certify both that “compliance in all respects with all applicable Federal anti-discrimination laws is material to the government's payment decisions” for False Claims Act purposes, and that “it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”

Third, federal agencies may now bring enforcement actions against private sector organizations based on the “Enforcement Threat Provision” in EO 14173, which directs “all federal agencies, with the Attorney General's assistance” to take “appropriate measures” to end “illegal discrimination and preferences, including DEI” in the private sector.

Importantly, the Fourth Circuit 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.

The NADOHE case in Maryland is just one of several federal court challenges to President Trump's DEI Executive Orders currently working their way through the federal court system. Other pending cases include Chicago Women in Trades v. Trump et al., N.D. Ill., Case No. 25-cv-02005 (Challenging EOs 14151 and 14173); National Urban League et al. v. Trump et al., D.D.C., Case No. 25-cv-00471 (Challenging EOs 14151, 14168, and 14173); San Francisco AIDS Foundation et al. v. Trump et al., D.D.C., Case No. 25-cv-1824 (Challenging EOs 14151, 14168, and 14173); and Shapiro et al. v. U.S. Department of the Interior et al., E.D. Pa., Case No. 25-cv-763 (Challenging EOs 14151 and 14173 among others). As these cases progress through the federal courts and different circuit courts of appeal, conflicting results are a distinct possibility. While the Fourth Circuit's decision represents the first appellate ruling addressing these issues, given the importance of these issues, we anticipate that the Supreme Court may soon be called to weigh in.

Seyfarth will continue to monitor these developments and provide updates as developments occur. For more information on how these changes may affect your workplace policies and compliance obligations, please contact any of the authors, a member of Seyfarth’s People Analytics team, or any Seyfarth attorney with whom you regularly work.

 

[1] On March 10, the district court clarified that its injunction applies to all federal executive branch agencies, and not just the agencies directly named in the suit. On March 13, plaintiffs filed an emergency motion presenting evidence that federal agencies (particularly HUD) were continuing to violate the injunction by presenting certification requirements, threatening funding for critical programs. Before the Fourth Circuit issued its order staying the injunction, on March 14, the district court held an emergency status conference to address these alleged violations.