The two Executive Orders

On January 20, President Trump signed Executive Order 14151, “Ending Radical Government DEI Programs and Preferencing.” This Executive Order  

• Instructed executive agencies to remove all “discriminatory programs [and positions],” including “illegal DEI,” “diversity, equity, and inclusion and accessibility (DEIA),” and “environmental justice” programs and professionals from executive branch agencies.
• Requires each federal agency to “terminate, to the maximum extent allowed by the law . . . ‘equity-related’ grants or contracts” within 60 days.

Then, on January 21, the President signed Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This Executive Order addresses private sector DEI programs:

• Each agency must include “in every contract or grant award,” a term that the contractor or grantee “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
• Compliance with that term is “material to the government’s payment decisions for purposes of the False Claims Act.
• The Attorney General is directed to deter “DEI programs and principles” in the private sector that constitute “illegal discrimination or preferences” by identifying “up to nine potential civil compliance investigations” in various sectors including “institutions of higher education with endowments over one billion dollars.”

Significantly, the terms “DEI,” “illegal DEI,” “DEI programs or principles,” “illegal discrimination or preferences,” “equity-related,” “DEIA,” or “environmental justice” are not defined in either Order.

The challengers  

On February 3, a lawsuit was filed in federal court in Maryland challenging these Executive Orders. The plaintiffs are the National Association of Diversity Officers in Higher Education, the American Association of University Professors, Restaurant Opportunities Center United, and the Mayor and City Council of Baltimore.

The challengers are seeking (1) a declaratory judgment that the Executive Orders are unconstitutional and (2) an injunction preventing enforcement of the Executive Orders.

The primary arguments

First, according to the plaintiffs, the Executive Orders violate the Due Process Clause of the Fifth Amendment to the U.S. Constitution because they fail to define the programs and policies that they aim to eliminate. (This is often referred to as “unconstitutional vagueness.”) Without clear definitions, the plaintiffs contend that they are left to speculate what speech or action is prohibited.

Second, the challengers assert that the Executive Orders suppress their First Amendment right to free speech. They argue that the threats of investigation and loss of contracts or grants impermissibly restrict the exercise of protected speech based on content and viewpoint relating to DEI.

Third, the plaintiffs contend that the Executive Orders violate the separation of powers doctrine by usurping Congress’ power to direct spending by the federal government. Article I of the U.S. Constitution vests spending powers exclusively in the hands of Congress. The plaintiffs allege that Executive Order 14151 empowers the executive branch to unilaterally terminate “equity-related” grants and contracts without the authority of Congress. Similarly, the plaintiffs contend that Executive Order 14173 imposes a condition on the receipt of federal funds without Congressional approval or delegation.

What’s next?

This may be the first of many legal challenges to these Executive Orders. For now, employers should monitor the litigation and other guidance regarding DEI. At a minimum, we recommend that employers review all DEI-related policies and practices to ensure compliance with the non-discrimination principles of Title VII of the Civil Rights Act.