On February 6, 2026, in National Association of Diversity Officers in Higher Education v. Trump, the U.S. Court of Appeals for the Fourth Circuit vacated a nationwide preliminary injunction that had temporarily blocked key provisions of two Executive Orders issued by President Trump aimed at addressing what it characterized as “illegal” diversity, equity, and inclusion (“DEI”) programs implemented by federal grantees and contractors. The three-judge panel remanded the case to the District of Maryland for further proceedings, concluding that the plaintiffs had not met the demanding standard required for facial invalidation at the preliminary injunction stage.

While the decision does not result in any immediate changes, as the lower court’s injunction had already been stayed, it does suggest that President Trump’s Executive Orders will survive judicial scrutiny with respect to facial challenges. As such, employers – particularly government contractors and grantees – need to be mindful that the enforcement risk posed by their DEI programs will remain at least for now.

Background

As we previously covered, at the beginning of President Trump’s second term, he issued two executive orders (the “Executive Orders”) with the goal of eliminating “illegal” DEI programming in the government and private sectors:

• The Ending Radical and Wasteful Government DEI Programs and Preferencing Executive Order, also known as the “Termination Provision” (EO 14151 § 2(b)(i)) (January 20, 2025), which orders each “agency, department, or commission head” to “terminate, to the maximum extent allowed by law, all ‘equity-related’ grants or contracts.”
• The Ending Illegal Discrimination and Restoring Merit-Based Opportunity Executive Order, also known as the “Certification Provision” and the “Enforcement Threat Provision” (EO 14173 § 3(b)(iv) & EO 14173 § 4(b)(iii)) (January 21, 2025), which orders:
  • Agency heads to include certifications in every contract or grant award certifying that the grantee does not operate any programs promoting DEI in violation of federal anti-discrimination laws and making compliance with federal anti-discrimination laws “material to the government’s payment decisions” for False Claims Act purposes.
  • The Attorney General to submit recommendations and a strategic plan for enforcement actions to challenge illegal DEI “programs or principles . . . that constitute illegal discrimination or preferences” in the private sector.

On February 3, 2025, Plaintiffs, the National Association of Diversity Officers in Higher Education, American Association of University Professors, Restaurant Opportunities Centers United, and the Mayor and City Council of Baltimore (collectively, “Plaintiffs”) filed suit against President Trump, Attorney General Bondi and other federal agencies and agency heads. Plaintiffs asserted that key provisions of the Executive Orders violated the First and Fifth Amendments.

On February 21, 2025, the U.S. District Court for the District of Maryland granted a nationwide preliminary injunction that paused enforcement of several provisions of both Executive Orders. The government appealed the district court’s injunction. On March 14, 2025, the Fourth Circuit granted a stay of the preliminary injunction pending appeal, finding that the government had shown a strong likelihood of success on the merits. The stay permitted implementation of the Executive Orders to continue until the Fourth Circuit issued its final ruling on the injunction.

Fourth Circuit’s Opinion and Reasoning

In a decision written by Chief Judge Albert Diaz, the Fourth Circuit began its analysis reviewing Article III jurisdiction. While the Fourth Circuit agreed that Plaintiffs had standing to challenge the Termination and Certification Provisions, it held that they subsequently lacked standing to challenge the Enforcement Threat Provision. First, the Attorney General and agency heads had already prepared their required report and submitted it to President Trump back in June 2025, leading the Court to question how an injunction could remedy any harm “from a report issued months ago.” Ultimately, the Court did not find standing because the provision was purely intra-governmental and Plaintiffs did not sufficiently allege an injury-in-fact.

Turning to the merits, the Court emphasized that Plaintiffs were bringing facial challenges, a form of relief that requires showing a law is unconstitutional in all, or at least a substantial number, of its applications. Plaintiffs brought a Fifth Amendment challenge arguing that the Termination Provision was unconstitutionally vague because it failed to define what constitutes “equity-related” grants or contracts. The Fourth Circuit rejected that argument as the provision only “instructs the President’s subordinates to act, and then only ‘to the maximum extent allowed by law.’”

The Executive Order directs government actors on how to allocate federal funding in accordance with presidential priorities. Drawing heavily on the Supreme Court case National Endowment for the Arts v. Finley, the Court explained that courts allow “greater latitude for vagueness” when the government acts as a funding patron rather than as a criminal or regulatory sovereign. Any uncertainty in how agencies apply the directive, the Court noted, may give rise to as-applied legal challenges, but it does not render the provision facially invalid.

In its First Amendment challenge, Plaintiffs contended that the Certification Provision impermissibly discriminated based on viewpoint and chilled protected speech by targeting DEI programs. The Court disagreed, holding that the provision required only certification of compliance with existing federal anti-discrimination laws which are laws that Plaintiffs had no constitutional right to violate and with which they already had to be in compliance.

Takeaways

As a result of the Fourth Circuit’s decision, federal agencies remain free to continue implementing the DEI-related orders as the litigation proceeds on remand in the district court. While the Fourth Circuit decision suggests the facial claims in the case face stiff headwinds on remand, it is expected that challenges to the Executive Orders will continue, likely turning on specific enforcement actions rather than facial constitutional claims.