A federal district court in Maryland has declined to block Executive Order 14398, which prohibits federal contractors from engaging in “racially discriminatory DEI activities.”
The order defines those activities as “disparate treatment based on race or ethnicity” in employment, contracting, program participation, and other covered areas.
The court held that under federal antidiscrimination law, “disparate treatment” means intentional discrimination. Under that narrow reading, the court construed the order as prohibiting intentional discrimination already barred by federal law, rather than DEI-related speech or activity. It left open the possibility of a challenge if the government seeks to enforce the order against lawful speech or activities.
The decision follows a Fourth Circuit ruling earlier this year rejecting similar constitutional challenges to President Trump’s 2025 DEI executive orders. Both decisions reflect the courts’ reluctance to invalidate the orders based on broader interpretations of their language.
Federal contractors should focus on whether a practice involves intentional discrimination rather than simply on whether it is associated with DEI.
Click here to read more from the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association. CWC’s DEI Risk Assessment Package can help employers evaluate and mitigate risk.