By Ibrahim Salah and Zane Fernandez
On January 21, 2025 (the “Effective Date”), President Trump issued an executive order (no. 14173) entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Executive Order”). This Executive Order significantly changes federal contractors’ compliance requirements and obligations under federal law, although it contains a 90-day grace period. Our firm released two client alerts (the “Client Alerts”) detailing the impact of the Executive Order and the two cases affecting its enforceability.
On February 21, 2025, a federal district court in Maryland issued a preliminary injunction (the “Injunction”) that, among other things, blocked two key provisions of the Executive Order: the provision requiring certifications by federal contractors and grant recipients pursuant to 31 U.S.C. § 3729, the False Claims Act (the “Certification Provision”), and the provision seeking to end private sector DEI preferences and identifying private sector compliance investigations (the “Enforcement Provision”). The Trump Administration filed an appeal of the Injunction with the Court of Appeals for the Fourth Circuit (the “Fourth Circuit”). On March 14, 2025, the Fourth Circuit granted the Trump Administration’s motion to have the Injunction paused while the Fourth Circuit ruled on the appeal of the Injunction. This now means that the Certificate Provision and the Enforcement Provision are reinstated.
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What Does this Mean for You?
As the Client Alerts recommend, federal contractors and grant recipients should consider reviewing their DEI programs and adjusting them if any might violate the new regulatory scheme as presented in the first Client Alert.
Gesmer Updegrove will continue monitoring developments in this area, including those related to the appeal and the Injunction. In the meantime, if you have any questions about the foregoing matters or the Executive Order generally, please contact Ibrahim Salah and Zane Fernandez.
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