Two recent court developments underscore that challenges to the Trump Administration’s Executive Orders addressing diversity, equity, and inclusion (“DEI”) are far from over. In one case, a federal court in Washington blocked enforcement of certain grant conditions against a group of local government plaintiffs in relation to Executive Orders 14173 (the “DEI Order”) and 14168 (the “Gender Order”). Just days earlier, however, plaintiffs challenging the DEI Order in Maryland voluntarily dismissed their lawsuit after the Fourth Circuit Court of Appeals upheld the relevant provisions against a constitutional challenge.

Although the cases reached different procedural outcomes, they involved different legal theories and leave important questions unresolved for federal contractors and grant recipients.

Seattle Court Blocks Enforcement of Grant Conditions Against Local Government Plaintiffs

On June 29, 2026, the U.S. District Court for the Western District of Washington granted a preliminary injunction preventing federal agencies from enforcing portions of the Administration’s DEI and Gender Executive Orders against the City of Seattle and several other local government plaintiffs. Those plaintiffs include the cities of Cleveland and Columbus, Ohio; Portland, Oregon; Durham, North Carolina; and Shoreline, Washington, as well as Allegheny County, Pennsylvania; Hennepin and Ramsey counties in Minnesota; and Prince George’s County, Maryland.

The plaintiffs challenged new grant conditions requiring recipients to certify that they do not operate DEI programs that violate federal anti-discrimination laws and, in some cases, comply with restrictions concerning “gender ideology.” They argued that federal agencies lacked authority to impose those conditions across a wide range of grant programs.

The court agreed that the plaintiffs were likely to succeed on their Administrative Procedure Act claims. The court held that the federal agencies had not identified statutory authority allowing them to impose the challenged conditions across the grant programs at issue, nor had they provided “a reasoned explanation tying those conditions to the statutory purposes of the affected grants.” The court also found that the challenged conditions bore “no apparent relationship to the grant programs at issue,” making them likely unlawful under the admittedly high arbitrary and capricious standard.

The ruling is an important one, but its reach is limited. The injunction applies only to the plaintiffs in the case. Critically, however, it does not invalidate the Executive Orders or prevent the Administration from enforcing them more broadly.

Maryland Plaintiffs End Their Constitutional Challenge

A few days earlier, on June 26, 2026, the National Association of Diversity Officers in Higher Education, the American Association of University Professors, and the City of Baltimore voluntarily dismissed their constitutional challenge to the DEI Order.

The dismissal followed the Fourth Circuit’s decision allowing the challenged provisions to remain in effect. In announcing the dismissal, the plaintiffs pointed to the government’s representations during the appeal, which the Fourth Circuit accepted, that the Executive Orders are narrower than some public statements about them suggested. Among other things, the government represented that the certification provisions do not expand existing federal anti-discrimination laws and are directed only at DEI programs that violate those laws.

What This Means for Employers

These developments do not resolve the broader legal questions surrounding the Administration’s DEI initiatives. Rather, they reflect that different courts are addressing different legal challenges involving the Executive Orders and their implementation.  Given apparent splits of opinion in courts of different circuits, this may increase the likelihood that an appeal based on those differences will ultimately be taken up for review by the U.S. Supreme Court.

Federal contractors and grant recipients should continue monitoring developments closely. While the Seattle injunction temporarily limits enforcement of certain grant conditions against the plaintiffs in that case, it does not provide nationwide relief. At the same time, the dismissal of the Maryland litigation leaves the Fourth Circuit’s decision intact, showing that the scope and application of the Executive Orders will likely continue to be addressed through ongoing litigation.

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Ballard Spahr’s Labor & Employment Group regularly advises employers on developments involving federal contractors, workplace discrimination, DEI initiatives, and evolving federal employment policies. We assist clients in evaluating compliance obligations and navigating rapidly changing legal developments.