On March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit lifted the nationwide injunction on President Trump's executive orders targeting inclusion, equity, and diversity (IE&D) programs, allowing enforcement while legal challenges continue.

The three-judge appellate panel issued a short order finding without discussion that the government had satisfied the factors for a stay as set forth by the U.S. Supreme Court. The basis for the decision appears to be a disagreement with the lower court’s determination that the plaintiffs are likely to prevail on the merits. The three judges seemed to agree that actions taken by the federal agencies pursuant to the executive orders could prove to be unconstitutional but that the orders, on their face, are not unconstitutional. Although all three judges agreed to the stay, each wrote a separate concurring opinion.

Judge Harris provided the most detail regarding the basis for her vote:

As the government explains, the challenged Executive Orders, on their face, are of distinctly limited scope. The Executive Orders do not purport to establish the illegality of all efforts to advance diversity, equity or inclusion, and they should not be so understood. Instead, the so-called “Certification” and “Enforcement Threat” provisions apply only to conduct that violates existing federal anti-discrimination law. Nor do the Orders authorize the termination of grants based on a grantee’s speech or activities outside the scope of the funded activities. Rather, the “Termination” provision directs the termination of grants, subject to applicable legal limits, based only on the nature of the grant-funded activity itself. On this understanding, the government has shown the requisite likelihood that the challenged provisions do not on their face violate the First or Fifth Amendment.

But 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.

This case, however, does not directly challenge any such action, and I therefore concur.

(citations omitted)

This decision frees the executive agencies to again seek to require contractors and grant recipients to certify that they do not operate any programs that violate any applicable federal anti-discrimination laws. Nevertheless, this does not mean that the manner in which the agencies proceed will be immune from further challenges, not only on constitutional grounds, but based on a failure to comply with required administrative procedures for adopting new contract terms.

Because the language that the agencies seek to impose may vary and because agreeing to these representations may have very significant legal consequences—including potential exposure to claims under the False Claims Act—federal contractors and grant recipients that are presented with such provisions should contact legal counsel before agreeing to accept them.

Implications of Decision

The Fourth Circuit’s decision to lift the injunction on President Trump's executive orders targeting IE&D programs will have several impacts on such initiatives moving forward:

• Federal Investigations: IE&D programs, especially those in federal agencies and businesses with government contracts, will face heightened scrutiny to ensure they do not promote illegal preferences or discrimination.

• Compliance Reviews: Organizations will need to review their IE&D initiatives under privilege to ensure they align with federal civil rights laws and do not violate the executive orders.

• Modification of Training: Employers may need to adjust or discontinue certain IE&D training programs to avoid potential legal challenges.

• Communication Strategies: Employers will need to communicate clearly with employees about any changes to IE&D programs and the reasons behind them.