Appeals Court Says President Trump Is Right on DEI?

On Feb. 6, the 4th U.S. Circuit Court of Appeals vacated a preliminary injunction of two executive orders (EO) — EO 14151 on “Ending Radical and Wasteful Government DEI Programs and Preferencing” and EO 14173 on “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” — finding they are not unconstitutional on their face. The court had previously stayed the injunction, pending appeal. As the two EOs focused on funding infrastructure inside the federal government with an emphasis on contracts and grants, the court did not find an infringement on the plaintiffs’ right to free speech.

EO 14173, issued Jan. 21, 2025, “was the most significant EO for the private sector” last year, said W. John Lee, an attorney with Morgan Lewis in Philadelphia. Established on May 19, 2025, the U.S. Department of Justice’s Civil Rights Fraud Initiative “is a direct result of the EO and is a prominent example of how it is reshaping federal enforcement of civil rights law.” EO 14151, issued Jan. 20, 2025, set the tone for EO 14173. EO 14173 reshaped compliance obligations for federal contractors and grantees. It also revoked EO 11246, ending EO-based affirmative action programs for women and minorities.

On Jan. 21, 2025, U.S. Equal Employment Opportunity Commission (EEOC) Chair Andrea Lucas made it clear that the EEOC’s enforcement priorities had shifted in alignment with President Donald Trump’s EOs.

If organizations have not focused on legal risk before, “they need to now,” cautioned Jonathan Segal, an attorney with Duane Morris in Philadelphia and New York City. “The enforcement landscape has changed.”

While the 4th U.S. Circuit Court of Appeals panel vacated the injunction, it sent the case back to the district court for further proceedings and left open the possibility of challenges based on individual application of the EOs.

Appeals Court Decision

In its decision, the 4th Circuit first held that the plaintiffs did not have “standing” as to EO 14173’s “enforcement threat provision.” The standing requirement “centers on whether the party invoking jurisdiction had the requisite stake in the outcome when the suit was filed,” the court explained.

The court next emphasized that the plaintiffs’ claim is that the EOs’ other challenged provisions are unconstitutional not as applied to the plaintiffs’ own conduct, but rather on their face, as they apply to the population generally. “Facial invalidation is manifestly strong medicine that has been employed by courts sparingly and only as a last resort,” the appeals court said.

Turning to the plaintiffs’ Fifth Amendment challenge of a provision in EO 14151 (“the termination provision”), the 4th Circuit noted that the Fifth Amendment guarantees that “no person shall … be deprived of life, liberty, or property without the due process of law.”

Due process demands fair notice and prohibits arbitrary enforcement, the court explained. The court ruled that both were satisfied.

The termination provision on its face does not ask anything of the plaintiffs, nor does it regulate private conduct, the court said. Instead, it instructs the president’s subordinates to act only to the maximum extent allowed by law.

“The president may determine his policy priorities and instruct his agents to make funding decisions based on them,” the 4th Circuit said.

But if government actors have terminated grants or contracts without regard to their legality, plaintiffs can sue those actors for terminating those contracts, the court added.

As for the First Amendment challenge to EO 14173’s certification provision, the government “has wide latitude to set spending priorities and to choose to fund one activity to the exclusion of the other,” the appeals court said. While the latitude isn’t limitless, the provision requires only that plaintiffs certify compliance with federal antidiscrimination laws, which the First Amendment doesn’t confer a right to violate, the 4th Circuit said.

In its reasoning, the court stated that the certification clause simply reflects requirements that already exist under federal law.

Reinforcement of EEOC’s Enforcement Direction

The 4th Circuit’s decision reinforces the EEOC’s enforcement direction. The prohibition in Title VII of the Civil Rights Act of 1964 against discrimination based on race, color, religion, sex, or national origin still applies.

“My priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent underenforcement,” Lucas said on Jan. 21, 2025.

A day after the U.S. Supreme Court’s landmark decision that made it easier for any plaintiff to have their anti-discrimination claim proceed, Lucas welcomed the decision and promised the agency would dismantle identity politics. The Supreme Court clarified “that discrimination on the basis of a protected characteristic is unlawful discrimination, no matter the identity of who engaged in the discrimination or which workers were harmed or benefited,” she said on June 6, 2025.

On Dec. 17, 2025, Lucas asked her followers a question on the social network X: “Are you a white male who has experienced discrimination at work based on your race or sex? You may have a claim to recover money under federal civil rights laws.” Her post signaled a shift in the EEOC's enforcement priorities. With the confirmation of Commissioner Brittany Panuccio, Lucas now commands a quorum — the minimum three out of five commissioners required to vote on litigation, rulemaking, and guidance.

On Jan. 22, the EEOC voted to rescind its 2024 harassment guidance, with agency leadership emphasizing a return to “even-handed enforcement and reiterating that employees retain all existing rights and remedies under federal law.”

Checklist: EEOC Rescinded Its Harassment Guidance

Here are examples of actions prohibited by Title VII, according to Sarah Goodman, an attorney with Offit Kurman in Philadelphia:

• Quota systems.
• Preferential treatment based on protected characteristics.
• Exclusionary practices.
• Stereotyping and assumptions.

Webinar: Navigating Title VII Compliance

She recommended the following best practices:

• Focus on outreach and recruitment. Implement strategies to attract a diverse pool of qualified applicants.
• Use skills-based assessments.
• Rethink mentorship and sponsorship programs.
• Offer diversity training that emphasizes inclusion.
• Optimize data collection and analysis.
• Conduct regular reviews and evaluations.

Framing Programs to Minimize Risk

For employers that wish to support inclusion while minimizing legal exposure, framing is critical.

Checklist: I&D Program Compliance Checklist

Training and people initiatives should emphasize:

• Organizational values and behavioral standards that apply to all employees.
• Shared responsibilities among leaders and employees to maintain lawful, respectful workplaces.
• Clear channels for employees to raise concerns about unlawful treatment.
• The organization’s commitment to investigating and addressing complaints consistently.
• The business rationale behind people initiatives, rather than externally driven social or political goals.

“Such training and learning should recognize organizational commonalities shared by all leaders and employees based on their common commitment to their employer’s values and legal behavioral standards,” said Stephen Paskoff, founder and chair of Employment Learning Innovations Inc. in Atlanta.

Toolkit: SHRM’s BEAM Toolkit for I&D

Litigation Elsewhere

Aside from the district court that granted the preliminary injunction that the 4th Circuit vacated, three other district courts have ruled on challenges of the EOs so far with different results. One denied a motion for preliminary injunction, one enjoined the certification requirements nationwide and the termination provision as to the plaintiff but otherwise denied a preliminary injunction motion, and one granted and denied in part a preliminary injunction motion. Those district courts are in the D.C. Circuit, 7th Circuit, and 9th Circuit, respectively.

Many HR leaders are asking what comes next. SHRM has consistently provided you with clear, prescient insight — focusing on the law, the horizon, and what truly matters for the workplace — so you can navigate these challenges with confidence. Trust SHRM for credible guidance and insights that keep you legally compliant, workplace unifying, and business accretive, positioning your organization for the future of work.