Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—California District Court Partially Enjoins Application of DEI and ‘Gender Ideology’ Executive Orders Against Coalition of LGBTQIA+ Nonprofit Organizations, (Jun 26, 2025)
Law Firms Mentioned:Sheppard Mullin Richter & Hampton
By Maria A. Gomez of Sheppard Mullin Richter & Hampton
Last week, the U.S. District Court for the Northern District of California in the case of San Francisco AIDS Foundation v. Trump temporarily halted enforcement of parts of the diversity, equity and inclusion and “gender ideology” Executive Orders - specifically, as they apply to the named plaintiffs in the case.
The lawsuit was filed on February 20, 2025, by the San Francisco AIDS Foundation and eight other LGBTQIA+ and HIV advocacy organizations. The complaint challenges three Executive Orders:
Executive Order 14168: “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government[1]
Executive Order 14151: “Ending Radical And Wasteful Government DEI Programs And Preferencing[2]
Executive Order 14173: “Ending Illegal Discrimination and Restoring Merit-Based Opportunity[3]
Collectively, these EOs seek to restrict or defund federal funding for programs supporting DEI initiatives and what the Trump Administration labels as “gender ideology.” The plaintiffs contend that these EOs violate constitutional rights, including due process and free speech, and unlawfully exceed presidential authority due to unconstitutionally vague language.
The Court partially granted the plaintiffs’ request for a permanent injunction, holding that the plaintiffs had demonstrated a likelihood of success on the merits of several of their challenges to the EOs. The Court found that the challenged provisions in the EOs likely violate plaintiffs’ rights and protections under the U.S. Constitution. Accordingly, the Court barred enforcement of three provisions in the EOs only as to the plaintiffs: the “Equity Termination Provision” - requiring agencies to terminate all “equity-related grants or contracts”; and the “Gender Termination” and “Gender Promotion” Provisions - barring federal funding for programs that “promote gender ideology.”
The Court held that the plaintiffs had standing to challenge the funding terminations as they faced actual or imminent loss of federal funds. In its analysis, the Court determined that the Equity Termination Provision is unconstitutionally vague - likely in violation of the Fifth Amendment’s Due Process Clause - creating arbitrary and discriminatory enforcement, and failing to give clear notice as to what conduct triggers funding termination.
The Court also concluded that the Equity Termination and Gender-related Provisions unconstitutionally target protected expression, likely in violation of the First Amendment. Specifically, the Court found that these provisions impose viewpoint-based restrictions on speech and activities that promote “gender ideology” or that advance DEI and equity, while allowing speech that opposes those concepts.
In addition, the Court determined that the “gender ideology” provisions facially and purposefully discriminate against individuals based on transgender status, without a legitimate government interest. As a result, the Court concluded that these provisions likely violate the Equal Protection Clause of the Fifth Amendment.
The Court declined to enjoin the “Certification Provision,” which requires federal grant recipients to certify that they do not operate DEI programs in violation of applicable federal anti-discrimination laws. The Court reasoned that this provision does not require grantees to abandon or refrain from engaging in DEI activities generally; it simply requires that grantees certify that their activities do not violate federal anti-discrimination laws. Furthermore, the Court saw no evidence that enforcement would extend beyond what is already otherwise required or prohibited by law. The Court thus found that the plaintiffs had not demonstrated a likelihood of success on the merits of their constitutional claims as to the Certification Provision.
The Court’s order provides temporary relief from the challenged provisions only to the named plaintiffs, and all other federally funded organizations remain subject to enforcement. Nonetheless, the Court’s reasoning may provide guidance for how similar challenges might be considered as litigation proceeds.
During this period of legal uncertainty, employers - especially those receiving federal funds - must carefully balance current federal directives with ongoing obligations to employees and applicants under civil rights laws. Given the complexity and evolving nature of these issues, employers are strongly advised to seek legal advice before making any changes to policies or practices to ensure continued compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Maria A. Gomez
Sheppard Mullin Richter & Hampton
350 South Grand Avenue, 40th Floor
Los Angeles, CA 90071
United States
E-mail: mbennett@sheppardmullin.com
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Footnotes
Sheppard Mullin previously reported its analysis on EO 14168.
Sheppard Mullin previously reported a primer on EOs 14151 and 14173.
Sheppard Mullin previously reported its analysis on EO 14173.
Attorneys: Maria A. Gomez (Sheppard Mullin Richter & Hampton).
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