Maryland Court Upholds Federal Contractor DEI Ban, Narrowly Read
A D. Md. judge refused to enjoin EO 14398 and the FAR Council memo barring "racially discriminatory" DEI by federal contractors, leaving False Claims Act exposure live but carving out lawful speech and research.
On October 14, 2026, the U.S. District Court for the District of Maryland denied a preliminary injunction in National Association of Diversity Officers in Higher Education v. Trump, leaving Executive Order 14398 and an April 2026 FAR Council memo in force. The EO directs agencies to insert a clause barring contractors from "racially discriminatory DEI activities," defined as "disparate treatment based on race or ethnicity." Noncompliance can trigger termination and future ineligibility, and the attorney general is directed to consider False Claims Act referrals.
The narrow construction is the operative protection. Following the Fourth Circuit's February 2026 NADOHE I decision, the court held that because "disparate treatment" means intentional discrimination, plaintiffs had no protectable First Amendment interest in speech already barred by federal antidiscrimination law. The court said the EO "may very well have run afoul of the First Amendment" absent that definition, confirmed that teaching and research on DEI fall outside it, and signalled that as-applied challenges remain available for enforcement beyond covered contract work; the government conceded a contract "could not be terminated" for discussing historical racial disparities. APA and presidential-authority claims remain undecided, and a nineteen-state coalition has filed a parallel suit. Next steps: audit contract clauses, map conduct to the disparate-treatment definition, and track Maryland v. Hegseth.