19 States Sue to Block Trump Order Banning DEI Clauses in Federal Contracts
Nineteen states and D.C. sued to halt a Trump order banning DEI clauses in federal contracts.
Why it matters: Legal professionals and contractors face new risks amid conflicting federal DEI and anti-discrimination policies. This lawsuit challenges contract clause legality and could alter compliance requirements across government procurements.
- President Trump signed Executive Order 14398 on March 26, 2026, banning specified DEI clauses in federal contracts.
- The FAR Council mandated inclusion of clause FAR 52.222-90 by April 27, 2026, with a July 24 deadline for contract modifications.
- Attorneys general from 19 states and D.C. filed suit on June 10, 2026, in U.S. District Court of Maryland, citing vagueness and lack of public notice.
- At least 25 federal agencies have adopted the clause, which critics including Oregon AG call legally unclear and disruptive.
On March 26, 2026, President Donald Trump issued Executive Order 14398 directing federal agencies to prohibit certain diversity, equity, and inclusion (DEI) contract provisions characterized as "racially discriminatory."
The Federal Acquisition Regulatory (FAR) Council followed with a memorandum on April 17, 2026, requiring the inclusion of clause FAR 52.222-90 in new federal contracts by April 27, 2026, and in existing contracts by July 24, 2026. This clause prohibits "racially discriminatory DEI activities" but does not clearly define prohibited conduct.
On June 10, 2026, attorneys general representing 19 states plus the District of Columbia filed a lawsuit in the U.S. District Court for the District of Maryland challenging the order and FAR clause as vague, lacking statutory authority, and implemented without required notice-and-comment rulemaking.
The plaintiffs argue that the clause's ambiguous language raises compliance risks for contractors adhering to established civil rights laws. Oregon Attorney General Dan Rayfield stated, "These unclear mandates threaten to punish contractors following long-standing anti-discrimination laws and disrupt vital programs for Oregonians."
At least 25 federal agencies have incorporated FAR 52.222-90, creating widespread uncertainty. Legal experts caution that this patchwork regulatory environment complicates contract negotiation and risk management.
This lawsuit follows recent federal enforcement trends emphasizing anti-discrimination compliance. For example, IBM settled allegations involving contract discrimination obligations with a $17 million payment in April 2026, demonstrating increased scrutiny on federal contracts.
As litigation proceeds, the outcome may clarify how DEI clauses align with existing civil rights frameworks, influencing procurement policies and compliance strategies for both government agencies and contractors.
By the numbers:
- 19 states plus Washington, D.C. — plaintiffs in lawsuit
- April 27, 2026 — deadline to add FAR 52.222-90 to new contracts
- At least 25 federal agencies — have adopted the contested FAR clause
Yes, but: While the lawsuit highlights contractor concerns, federal agencies maintain the clause promotes nondiscrimination and ensures procurement integrity, underscoring ongoing policy tensions.
What's next: The U.S. District Court for the District of Maryland is set to hear preliminary motions in late 2026, potentially shaping federal contract DEI enforcement.