Articles

Employment Law Update: Fourth Circuit Vacates Injunction on Anti-DEI Executive Orders

On February 6, 2026, the U.S. Court of Appeals for the Fourth Circuit issued a significant ruling in National Association of Diversity Officers in Higher Education v. Trump, vacating a preliminary injunction that had blocked key provisions of President Trump's Executive Orders (EOs) targeting diversity, equity, and inclusion programs. In its decision, the three-judge panel concluded that the EOs, which direct federal agencies to terminate "equity-related" grants and contracts and require federal contractors and grant recipients to certify compliance with anti-discrimination laws, are likely constitutional and do not impermissibly chill protected speech. Chief Judge Albert Diaz wrote that "President Trump has decided that equity isn't a priority in his administration and so has directed his subordinates to terminate funding that supports equity-related projects to the maximum extent allowed by law," adding that "[w]hether that's sound policy or not isn't our call."

The court addressed three provisions challenged by plaintiffs, including the City of Baltimore and several academic associations. First, regarding the "Termination Provision," which directs agencies to terminate all equity-related grants and contracts, the court held that because the provision is an internal directive to executive-branch actors instructing them to act only "to the maximum extent allowed by law," it is not unconstitutionally vague and does not directly regulate private conduct.

Second, the court rejected First Amendment challenges to the "Certification Provision," which requires grant recipients and contractors to certify that they do not operate DEI programs violating federal anti-discrimination laws. The panel emphasized that this provision only requires compliance with existing federal law and that plaintiffs have no constitutionally protected right to operate DEI programs that violate anti-discrimination statutes. Notably, the court stated that if the administration misinterprets federal anti-discrimination law when enforcing these provisions, affected parties "can challenge that interpretation in a specific enforcement action."

Key Takeaways for Employers

For employers who are federal contractors or grant recipients, this decision has immediate practical implications. First, organizations should carefully review all contract and grant terms regarding compliance with federal non-discrimination laws or DEI-related provisions. Before agreeing to new contract terms containing certification requirements, contractors should evaluate potential risks and understand that false certifications could expose them to liability under the False Claims Act.

Second, organizations that agree to such provisions should conduct an ongoing audit of their DEI policies and practices to ensure good-faith compliance with their representations and existing federal anti-discrimination law. While the court did not endorse the administration's view of which DEI programs violate federal law, it made clear that future challenges must be based on specific allegations of unlawful implementation rather than facial attacks on the EOs themselves.

Though this ruling does not end the legal battle, employers should recognize that the Fourth Circuit has cleared a significant path for the administration's enforcement efforts. Whiteford’s Labor and Employment Practice Group will continue to monitor developments in this rapidly evolving area and advise clients as further guidance emerges.

---

The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.