President Donald Trump’s directive to cut off federal funding to organizations engaging in diversity, equity and inclusion has joined the growing list of temporarily blocked executive orders.
Going forward, the administration must not “pause, freeze, impede block, cancel or terminate” funds to any grant recipients or contractors—not just plaintiffs—for “‘equity-related’ grants or contracts,” according to a late Friday court order referencing a January 20 executive order.
U.S. District Judge Adam Abelson, a Joe Biden appointee who serves in the U.S. District Court for the District of Maryland, wrote in an accompanying memorandum opinion that such restrictions would likely violate constitutional protections related to free speech and due process.
For the latter, he agreed with plaintiffs that the order’s criteria were vague, with key terms like “illegal DEI” or “equity-related” undefined and likely open to arbitrary interpretation by federal agencies.
Additionally, per Abelson’s order, the administration may not include requirements in its grant awards or contracts that recipients certify they do not “operate any programs promoting DEI,” as was outlined in a January 21 executive order.
Also partially blocked from that order is an instruction for the Department of Justice to pursue “potential civil compliance investigations of publicly traded corporations, large nonprofit corporations or associations, foundations with assets of [$500 million] or more, State and local bar and medical associations, and institutions of higher education with endowments over [$1 billion].”
While the government is barred from bringing any such enforcement action against these private sector entities—for instance, a False Claims Act case—it may continue putting together a strategic enforcement plan and investigating practices it believes may violate federal anti-discrimination laws.
The lawsuit was brought by higher education groups and the city of Baltimore, and is one of at least four directly challenging executive orders related to the termination of DEI programs.
The plaintiffs’ affiliations speak to the impact the administration’s orders would have on higher education programs whose research explores topics of equity and diversity, including numerous medical colleges and academic medical centers. Other Medicare program participants may also fall within the administration's scope based on the government's interpretation of a "contractor," per legal firms.
The medical industry was outlined by name by the White House as one of the country’s “influential institutions … [that] have adopted and actively use” DEI. Several leading trade groups focused on medical education and the American Hospital Association have previously released statements supporting DEI policies in staffing to improve care delivery—though the latter has temporary pulled that statement from its website, with a note saying it is “reviewing its activities in light of recent Executive Orders and legal developments, which has required changes to our website.”
In a statement, the Association of American Medical Colleges (AAMC) told Fierce Healthcare it "continues to actively review the executive orders and other directives as well as legal actions relevant to the orders. To advance the nation’s health, the AAMC remains fully committed to its priorities and mission: to improve the health of all patients, families, and communities by ensuring equitable access to high-quality care; building and strengthening a physician workforce that reflects the needs of all Americans; advancing medical research that leads to prevention, diagnosis, treatment, and cures for patients and communities; and addressing long-standing health inequities.”
That said, there is still some ambiguity as to whether private sector healthcare entities such as hospitals fall under the orders’ scope, with law firm Venable noting in a blog post that there’s a grey area as to whether provider and payer Medicare program participants are considered federal contractors.
Whereas highly influential players in the U.S. economy such as Amazon, Google and Morgan Stanley have watered down or omitted prior DEI policies, health systems have generally told press they are aren’t upending organizational values but are keeping a careful eye on legal developments and other policymaking as it relates to hiring and care delivery.
Seyfarth Shaw, a legal advisory and services firm, specified in a brief that the Judge’s Friday order does not prevent private litigants from bringing challenges to DEI programs under existing anti-discrimination laws, which it said have increased since the executive orders.
Additionally, “given the intense public and political attention currently focused on DEI initiatives, as well as the breadth of the Court’s constitutional findings and injunction, we expect the government to seek expedited review by the Fourth Circuit, and that this issue will eventually be presented to the Supreme Court,” the firm wrote.