20 Attorneys General Sue To Block Executive Order Targeting DEI In Federal Contracts

Attorneys general from 19 states and the District of Columbia are suing the Trump administration to block what they say is an arbitrary and capricious executive order targeting diversity, equity and inclusion efforts among federal contractors. 

The lawsuit is targeting rules that were created as a result of President Donald Trump’s executive order on March 26 titled Addressing DEI Discrimination by Federal Contractors. The order includes clauses that the president gave federal agencies 30 days to incorporate verbatim into contracts saying the contractor “will not engage in any racially discriminatory DEI activities.”

The rules affect anyone who signs contracts with the government, including construction work and all leases, new and old, with the General Services Administration.

The states’ attorneys argue that federal agencies didn’t follow the proper steps, such as a public comment period, as they pushed to implement the executive order and say that the new rules it generated are too vague to be fairly enforced. 

The states are asking the Maryland District Court to declare the executive order unlawful and enter injunctions against a host of federal agencies to prevent them from implementing its terms. If the states are successful, the case would almost certainly be appealed. 

The states argue that the executive order is not only unlawful but also a hindrance to economic growth that fails to help eliminate discrimination. 

“Federal agencies have not adequately explained … what the contract terms mean or require from contractors, or how they differ from other antidiscrimination requirements previously and currently applicable to federal contractors,” the suit says. “Given the lack of clarity, the contract terms sow confusion, increase compliance costs, and disrupt lawful and necessary efforts by federal contractors to prevent, detect, and remedy unlawful racial discrimination in their activities.”

The complaint was filed on June 10 and names 57 defendants, including the United States, 20 cabinet members or agency heads, 20 of the agencies themselves and the Federal Acquisition Regulation Council, the regulatory body that ultimately makes the rules for federal acquisitions, and its members.  

The White House reiterated its position against “discrimination in any form” in a statement to Bisnow on Thursday. 

“Individual dignity, hard work, and excellence made America the greatest country in the world, and DEI discrimination has no place in it,” White House Assistant Press Secretary Olivia Wales said in an email. “These practices are wrong, often illegal, and impose real costs on the American people. When the federal government contracts with companies that engage in them, taxpayers foot the bill.”

Trump’s March executive order followed a host of other actions from the White House meant to eliminate DEI programs and broader messaging, including an executive order signed the day of his inauguration. The order says the administration “has made significant progress in ending racial discrimination in American society” but says that some companies “continue to engage in DEI activities and often attempt to conceal their efforts to do so.”

Gordon Griffin, a partner at Holland & Knight, said Wednesday on LinkedIn that the firm was getting a lot of questions about enforcement of the executive order. The law firm published an analysis Thursday that outlined impacts from hiring to cybersecurity resulting from the rule changes to federal leases, which were reflected in the April release of the GSA’s rulebook.

“The April 2026 revision to GSA Form 3517B adds significant new requirements and a substantial new compliance risk, one that could result in a default termination, [False Claims Act] liability or even exclusion from government leasing opportunities,” the analysis says. “This shouldn't be taken lightly, and lessors should consider very carefully whether to sign on for the new DEI obligations.”

The states argue that the regulations are too vague to be reasonably and fairly enforced. It’s unclear whether a contractor seeking employees for a federal contract could share a job post at a historically Black college or attend a job fair in a predominantly white rural community, they argue. 

The executive order also requires contractors to make internal records available to federal regulators to prove compliance, which the states argue adds a significant bureaucratic burden to businesses. 

The states suing are California, Colorado, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Washington, Wisconsin, Virginia and Vermont, and they are joined by the District of Columbia. 

The shift in regulations was substantial enough to trigger a mandatory public comment and review period that the Trump administration skirted, the attorneys general argue. States have rushed to implement the order, which included penalties like the loss of a contract for noncompliance, they wrote.

“The abrupt and unlawful rollout of Executive Order No. 14398 and its implementation threatens grave and irreparable harm to the States’ economic interests and their ability to serve the public,” the suit says. “The States are bringing this action to stop implementation of the Executive Order and stem that harm.”