The Fourth Circuit on Friday lifted a block on President Donald Trump's executive orders that terminated federal diversity, equity, and inclusion programs and aimed to encourage government contractors to do the same, saying it's not the court's role to determine if the directives are "sound policy."

A three-judge panel vacated a preliminary injunction handed to the city of Baltimore and a trio of academic and restaurant workers' groups in their First and Fifth Amendment challenges to the executive orders, after determining the directives are likely not impermissibly vague, nor do they chill speech.

"President Trump has decided that equity isn't a priority in his administration and so has directed his subordinates to terminate funding that supports equity-related projects to the maximum extent allowed by law," wrote Chief Judge Albert Diaz, who authored the opinion. "Whether that's sound policy or not isn't our call."

In a separate concurrence, Judge Diaz raised concerns about a "sinister story" playing out within the government after pointing to evidence that DEI programs have been disparaged and carelessly cut. He encouraged those discouraged by the ruling to "keep the faith."

"For those disappointed by the outcome, I say this: Follow the law," Diaz said. "Continue your critical work. Keep the faith. And depend on the constitution, which remains a beacon amid the tumult."

In January 2025, Trump issued two executive orders that ordered government agencies to terminate all DEI programs and equity-related grants and certify that any grant recipients do not employ DEI programs that violate anti-bias law. The president's order also instructed the heads of all agencies, in tandem with the attorney general, to create a plan to deter DEI programs that dole out preferences based on identity as opposed to merit.

The Mayor and City Council of Baltimore, the American Association of University Professors, and the National Association of Diversity Officers in Higher Education subsequently sued in February 2025, and secured an injunction blocking the challenged provisions of the orders from taking effect. U.S. District Judge Adam B. Abelson said parts of the orders appeared unconstitutionally vague and likely restricted free speech in violation of the First Amendment.

The Fourth Circuit stayed the implementation of the injunction while the government appealed the order.

In Friday's ruling, the panel said the groups lacked standing to challenge the report crafted by the attorney general, given that it has already been created and provided to the president in June. While the groups argued they could still face retribution by the government for supporting DEI measures, the panel said they overstate the threat, given that the report focuses on executive agency processes and programs that don't directly affect the private sector.

Their standing is sound, the panel said, on the provisions of the executive orders that cancel DEI government grants and require government contractors to certify that they will not host DEI programs given that the groups and their members have lost funding due to the government's actions.

However, the groups have failed to show that the contract termination provision is unconstitutionally vague, the panel said. They argued the executive order doesn't define what an equity-related grant is, therefore they have no guidance on what contracts may not comply with the order, and the government can cancel contracts as it pleases based on protected speech.

The panel knocked down this argument, saying the order doesn't regulate private conduct, rather it instructs executive agencies to take action only "to the maximum extent allowed by law."

The groups argued that government agencies haven't terminated contracts within the bounds of the law. But the panel said those are separate legal disputes that the groups can bring against those agencies in separate proceedings.

The groups told the Fourth Circuit that the certification provision of the executive orders should be struck down because it pushes viewpoint discrimination by targeting DEI-related activity. The panel noted that the provision only requires grant recipients to certify they comply with federal anti-discrimination laws, adding that the First Amendment does not protect violations of those laws.

Their claims fall apart, the panel said, because the groups don't have protection under the First Amendment to operate DEI programs that violate federal law.

"Plaintiffs suggest that defendants view all DEI programs as illegal under existing anti-discrimination law," the panel said. "Perhaps, but the certification provision doesn't say that."

Skye Perryman, president and CEO of Democracy Forward, which represents the groups, told Law360 in a statement that the court's ruling doesn't endorse the administration's DEI agenda.

"We will continue to use every legal tool available to take this administration to court — and win — as we have done when the administration's actions infringe on the rights of people and communities," Perryman said. "We are looking forward to continuing to litigate this case in the district court."

Representatives of the government did not immediately respond to requests for comment.

U.S. Circuit Judges Albert Diaz, Pamela A. Harris, and Allison Jones Rushing sat on the panel.

The Mayor and City Council of Baltimore, the American Association of University Professors, and the National Association of Diversity Officers in Higher Education are represented by Niyati Shah, Noah Baron, and Alizeh Ahmad of Asian Americans Advancing Justice and Aleshadye Getachew, J. Sterling Moore, Brooke Menschel, Cynthia Liao, Audrey Wiggins, and Skye Perryman of Democracy Forward Foundation.

The government is represented by Brett A. Shumate, Yaakov M. Roth, Eric D. McArthur, Mark R. Freeman, Daniel Tenny, and Jack Starcher of the U.S. Department of Justice.

The case is National Association of Diversity Officers in Higher Education v. Donald Trump, case number 25-1189, in the U.S. Court of Appeals for the Fourth Circuit.