Court Denies Preliminary Relief on Federal Contractor DEI Order
A Maryland district court declined to block EO 14398, reading its federal contractor DEI clause as reaching only unlawful intentional discrimination and leaving the FAR Council memo in force as litigation continues.
On Oct. 14, 2026, the U.S. District Court for the District of Maryland denied preliminary relief to five associations challenging Executive Order 14398, "Addressing DEI Discrimination by Federal Contractors," and declined to temporarily enjoin the Federal Acquisition Regulation Council's implementing memorandum (National Ass'n of Diversity Officers in Higher Education v. Trump, No. 26-cv-1532 (D. Md.)). The court read "disparate treatment" as unlawful intentional discrimination, so the clause reaches conduct already barred by federal antidiscrimination law, and rejected vagueness challenges to the clause's tie to contract performance: the EO applies only to work performed under the contract containing the clause. The court also suggested contractors may still challenge enforcement targeting protected speech or conduct outside a covered contract's scope. Because this is a preliminary ruling, the case is unresolved and the EO and implementing memo remain in force. Sophisticated counsel will care because the construction narrows what the clause can be enforced against, while underlying exposure — contract termination, ineligibility for future contracts, and False Claims Act enforcement — is unchanged. Next steps are mapping clause language to each contract and program and watching for a merits-stage ruling or appellate review; the opinion reportedly offers limited guidance on how the contract-performance limit applies to particular activities, so contractors should not treat it as a safe harbor.