Anti-DEI Executive Orders: What Federal Grant Recipients Should Know

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DEI Executive Orders and Resulting Litigation

Within the first week of his second term, President Donald Trump issued several orders targeting diversity, equity, and inclusion (DEI) efforts. These include Executive Order 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) and Executive Order 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity) (collectively, the DEI Orders). In a recent development, some federal agencies have begun directing federal grantees to self-certify compliance with the DEI Orders on a quick-turnaround basis or risk losing their funding. This alert discusses the content of the DEI Orders, the status of current legal challenges, and considerations for grantees that receive self-certification requests.

Order 14151 requires federal agencies to “terminate, to the maximum extent allowed by law . . . all ‘equity-related’ grants or contracts[] and all DEI or [Diversity, Equity, Inclusion, and Accessibility] performance requirements for employees, contractors, or grantees.”¹ Meanwhile, Order 14173 instructs “the head of each agency” to “include in every contract or grant award:

(A) A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of [the False Claims Act]; and

(B) A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”²

In response, on February 3, the City of Baltimore and groups representing higher education diversity officers, professors, and restaurant workers filed a lawsuit challenging the DEI Orders.³ The plaintiffs argued that the DEI Orders are unconstitutionally vague, violate the free speech clause of the First Amendment, and interfere with Congress’s spending powers under Article I of the Constitution. The court heard oral argument on the plaintiffs’ motion for a temporary restraining order and/or preliminary injunction on February 19 but has not issued an opinion as of the date of this alert. It is possible the court could enjoin the enforcement of the DEI Orders, which would presumably halt (at least temporarily) agency self-certification requests and arguably result in an automatic extension of self-certification response deadlines that pass while the injunction is in place.

Another lawsuit was filed on February 19 by the National Urban League, the National Fair Housing Alliance, and the AIDS Foundation of Chicago. The court in that case has not yet acted.⁴ Therefore, there is currently no court order stopping agencies from enforcing the DEI Orders.

Considerations for Responding to Certification Requirements

Order 14173 requires federal agencies to include certification requirements in all federal contracts and grants, but not does specify a date by which that must occur. Some federal grantees have already begun receiving federal agency requests to self-certify compliance with the DEI Orders, in some cases within five calendar days. The agency self-certification communications are not uniform, and some go beyond the commands of the DEI Orders. For example, one agency communication we reviewed directed the grantee to certify not only that it complies with the DEI Orders, but also that it does not “promote DEI activities.”

The ad hoc nature of the certification requests is unusual; typically, when implementing executive orders, the federal government issues an official contract clause to be used across agencies after a public notice and comment period. We understand that some federal agencies have told federal contractors and grantees that the certification requirements under Order 14173 must be included in contracts by April 1.⁵ It is possible that official government certification language and guidance will be issued by such date.

Federal grant recipients that receive ad hoc self-certification requests should carefully review the certification language, as well as the text of each executive order to which the certification refers. It is important that grant recipients understand what they are certifying to, as knowingly submitting a false certification could result in serious financial penalties under the federal False Claims Act.⁶

Federal grantees may also wish to ask the requesting agency for clarification of the specific programs and activities covered by the certification, as well as seek an extension of their response deadline to allow adequate time to consult with their board of directors and comply with internal processes required by their bylaws and governance policies. They may also wish to seek clarification of how diversity, equity, and inclusion are defined; the government’s interpretation of anti-discrimination laws; and how DEI violates those laws. Finally, they could consider asking for an extension until such time as the government issues official Order 14173 contract certification language.

The situation is evolving. We are aware that some federal grant recipients have successfully sought self-certification extensions of varying lengths. Other extension and clarification requests have not been granted.

Unless enforcement of the DEI Orders is enjoined, many federally funded grantees will be put in the untenable position of deciding whether to self-certify compliance with vaguely worded government directives or risk losing funding. Grantees for whom federal funding is essential could consider providing modified certifications that mirror the language of the DEI Orders (rather than the broader language of many certification requests). For example, grantees could certify that they comply with all applicable federal anti-discrimination laws and do not operate any DEI programs that violate applicable federal anti-discrimination laws. Federal grantees that decide to self-certify would be well advised to internally document the organization’s interpretation of the certification request and how it arrived at its good faith conclusion that it does not violate the executive orders referenced in the particular certification. Creating such a record could help the organization counter future FCA liability, as claims under the FCA require knowledge of falsity or reckless disregard for the truth.

Organizations Should Consider the Consequences of Retreating From Legally Compliant DEI Programs.

The broadly worded self-certification requests appear to be intended to chill private sector DEI efforts. However, organizations that do not receive federal funding are not subject to the DEI Orders. Moreover, absent an agency request, even federally funded nonprofits are not required to self-certify compliance with the DEI Orders.

Importantly, the DEI Orders themselves do not proscribe lawful DEI efforts. All nonprofits should consider the reputational, financial, and mission-related impact of retreating from their previously adopted, lawful DEI practices.

As they navigate this quickly changing environment, nonprofits and other private sector entities may wish to review guidance issued by a group of state attorneys general on February 13 to help such organizations pursue legally compliant DEI programs.⁷ The attorneys general outline best practices for inclusive recruitment and hiring; professional development and retention; and assessment and integration. This guidance is intended to allow employers to ensure they remain compliant with state and federal anti-discrimination laws, like Title VII and the Americans with Disabilities Act, which remain in force regardless of the DEI Orders.

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Organizations faced with certification requests may wish to seek the advice of an attorney. In addition, organizations that receive termination notices or stop-work orders should contact legal counsel as soon as possible to explore their options. There may be both internal dispute processes at agencies and avenues to seek remedies through the courts, but these remedies may require swift action.

¹ Exec. Order 14151(2)(b)(i), 90 Fed. Reg. 8339, 8339 (Jan. 29, 2025).
² Exec. Order 14173(3)(b)(iv), 90 Fed. Reg. 8633, 8634 (Jan. 29, 2025).
³ Complaint, National Association of Diversity Officers in Higher Education v. Trump, No. 1:25-cv-333 (D. Md. Feb. 3, 2025).
⁴ Complaint, National Urban League v. Trump, No. 1:25-cv-471 (D.D.C. Feb. 19, 2025).
⁵ See Morrison Foerster, Unpacking the Trump Administration’s DEI Orders and Actions – FAQs and Action Plans (Feb. 19, 2025), https://www.mofo.com/resources/insights/250219-unpacking-the-trump-administration-s-dei-orders.
⁶ The FCA imposes civil liability on anyone who knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the U.S. government, or who knowingly makes or uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim to the U.S. government. 31 U.S.C. § 3729(a)(1)(A)-(B). It also imposes liability for conspiring to commit such conduct. Id. § 3729(a)(1)(C). Defendants liable under the FCA may be subject to treble damages as well as civil penalties per false or fraudulent claim. Id. § 3729(a)(1).
⁷ Multi-State Guidance Concerning Diversity, Equity, Inclusion, and Accessibility Employment Initiatives, Attorneys General of Massachusetts, Illinois, Arizona, California, Connecticut, Delaware, Hawaii, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, and Vermont (Feb. 13, 2025), https://www.mass.gov/doc/multi-state-guidance-concerning-diversity-equity-inclusion-and-accessibility-employment-initiatives/download.