Fourth Circuit Vacates Preliminary Injunction Against DEI Executive Orders

A three-judge panel of the US Court of Appeals for the Fourth Circuit has ruled that a group of plaintiffs were not entitled to a preliminary injunction halting the Trump Administration’s implementation of parts of Executive Orders 14173 and 14151. The closely watched case has left contractors in much the same place, as the Trump Administration continues to aggressively enforce these new EOs while other challenges remain pending.

EO 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”, was issued in January 2025 and, among other things, directed all federal agencies to include a new certification requirement in all contracts. The certification requires the recipient to ‘certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws’ and to agree that compliance with all federal nondiscrimination laws is material to the contract under the False Claims Act. EO 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” directed federal agencies to terminate DEI-related requirements for contractors and grantees.

In February 2025, a preliminary injunction was issued against the certification and termination clauses after a group of plaintiffs made up of the National Association of Diversity Offices in Higher Education, the American Association of University Professors, Restaurant Opportunities Centers United, and the mayor and city council of Baltimore, Maryland claimed that these parts of the EOs were unconstitutional, violating their First Amendment free speech rights and their Fifth Amendment due process rights. In March, 2025, the Fourth Circuit stayed enforcement of the preliminary injunction pending appeal.

In the February 6, 2026 ruling, the three-judge panel for the Fourth Circuit wrote that the plaintiffs failed to prove that the EOs infringed on their constitutional rights, as the EOs consisted of orders to federal agencies that did not require direct action by the plaintiffs. The panel also wrote that if the EOs resulted in termination of federal contracts that the plaintiffs felt violated their free speech protections, they can sue specifically for the termination of those contracts. Finally, the panel found that the certification provision did not restrict free speech because there is no constitutional right to operate DEI programs that violate federal anti-discrimination laws. The panel emphasized that plaintiffs could challenge this provision as applied if the government “misinterprets” federal nondiscrimination law.

Judge Albert Diaz issued a concurrence emphasizing that the court’s decision was narrow since the plaintiffs had brought facial challenges only. He noted that the government had represented at oral argument, “that there is ‘absolutely’ DEI activity that falls comfortably within the confines of the law.” Judge Diaz concluded his concurrence by stating “For those disappointed by the outcome, I say this: Follow the law. Continue your critical work. Keep the faith. And depend on the Constitution, which remains a beacon amid the tumult.”

While other challenges to the two EOs remain pending, the Trump Administration is actively enforcing its mandate to eliminate employment and other practices it considers in violation of federal civil rights laws. Federal contractors should thoroughly review their policies and practices to ensure compliance with current federal law and carefully evaluate any statements made when entering into federal contracts. While most contractors have already assessed their DEI-related policies and made necessary adjustments, ongoing monitoring of employment data will be essential. This is particularly important for federal contractors and grant recipients, given the Administration’s emphasis on enforcing laws prohibiting discrimination based on race, sex, and other protected characteristics in DEI initiatives and other employment practices when government funding is involved.