Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—D.D.C.: Executive Order targeting Susman Godfrey is permanently enjoined, (Jul 8, 2025)

By Kathleen Kapusta, J.D.

“Defendants do not point to any statutory authority that empowers the President to punish a law firm for its choice of clients, donations, or other speech, and the court is not aware of any law that would support such action.”

Granting summary judgment to Susman Godfrey LLP on its suit challenging the constitutionality of President’s Trump’s Executive Order that targeted the firm based on the clients it represents and the causes it supports, and denying the government’s motion to dismiss, a federal court in the District of Columbia found that the EO violates the U.S. Constitution and must be permanently enjoined. The order, observed the court, “was one in a series attacking firms that had taken positions with which President Trump disagreed,” and in the ensuing months, “every court to have considered a challenge to one of these orders has found grave constitutional violations and permanently enjoined enforcement of the order in full” (Susman Godfrey v. Executive Office of the President, No. 25-1107 (LLA) (D.D.C. June 27, 2025)).

Executive Order. In April 2025, President Trump issued Executive Order 14263, titled “Addressing Risks from Susman Godfrey,” along with an accompanying “fact sheet.” The order, which followed similar EOs targeting several other law firms, contains six sections. Section 1, states President Trump’s belief that “[l]awyers and law firms that engage in activities detrimental to critical American interests should not have access to our Nation’s secrets, nor should their conduct be subsidized by Federal taxpayer funds or contracts.” It accuses Susman, without explanation, of “spearhead[ing] efforts to weaponize the American legal system and degrade the quality of American elections;” asserts that Susman “funds groups that engage in dangerous efforts to undermine the effectiveness of the United States military through the injection of political and radical ideology;” and claims that Susman “supports efforts to discriminate on the basis of race” and “itself engages in unlawful discrimination, including... on the basis of race.”

Section 2 titled “Security Clearance Review,” instructs agency heads to “immediately take steps consistent with applicable law to suspend any active security clearances held by individuals at Susman, pending a review of whether such clearances are consistent with the national interest,” while Section 3, titled “Contracting,” sets several limitations on the ability of Susman and parties that do business with Susman to contract with the federal government.

Section 4 states only that “[n]othing in this order shall be construed to limit the action authorized by section 4 of Executive Order 14230 of March 6, 2025,” which instructs the Chair of the EEOC to review the practices of large law firms for consistency with Title VII and to spearhead investigations into law firms that “do business with Federal entities for compliance with race-based and sex-based non-discrimination laws and take any additional actions the Attorney General deems appropriate in light of the evidence uncovered.”

Section 5 instructs agency heads to “provide guidance limiting official access from Federal Government buildings to employees of Susman when such access would threaten the national security of or otherwise be inconsistent with the interests of the United States” and Section 6 explains that the order must be implemented “consistent with applicable law.”

TRO. Susman filed suit to challenge the constitutionality of the order and sought a temporary restraining order, which the court granted on April 15, temporarily enjoining the government from implementing or giving effect to Sections 1, 3, and 5. Susman then moved for summary judgment and sought a permanent injunction. The government moved to dismiss the law firm’s claims.

Government’s arguments. Addressing first the government’s arguments, including that Section 1 “is simply government speech” exempt from First Amendment scrutiny, the court noted that Susman was not asking it to “muzzl[e] the Executive” by enjoining the President’s speech but rather was asking it to enjoin the government “from implementing or giving effect to the Order in any way, including by relying on any of the statements in Section 1.” In this way, said the court, the firm was asking it to “scrutinize” the “application of state power” for evidence of an unconstitutional attempt to coerce and thus it could proceed with its claims related to Section 1.

Also rejected was the government’s contention that the blanket suspension of security clearances under Section 2 was not judicially reviewable in light of D.C. Circuit precedent. Here, the court explained, Susman was not seeking to review any discretionary judgment about an individual security clearance but was instead raising a constitutional challenge to Trump’s blanket policy of revoking all its employees’ clearances.

Nor was the court persuaded by the government’s argument that the firm did not have standing to bring claims related to Section 3. While the court agreed that Susman did not identify a current client that severed ties with it or a prospective client that declined to engage it on the basis of Section 3, it sufficiently alleged that such harms were actual or imminent. Specifically, it alleged that Section 3 is chilling its current and prospective attorney-client relationships and that clients are inquiring about how the order will affect its ability to represent them. Because these harms are directly tied to Section 3, the court found Susman had standing to challenge that section.

As to Section 4, the court, agreeing with Susman, found the threat of targeted investigations by the EEOC and Attorney General, with the prospect of potential prosecution, was retaliation for First Amendment activity that “damages Susman Godfrey’s reputation, with attendant harm to client relationships and Firm business prospects.” Thus, it could also proceed with its claims concerning this Section. Finally, regarding Section 5, while the government argued that the firm’s claims would not be actionable until the agency heads provide relevant guidance, the court pointed out that Section 5 does not instruct agency heads to issue guidance but instead directs agency heads to “refrain from hiring [Susman] employees.” Accordingly, said the court, Section 5 presents a ripe matter for adjudication.

First Amendment claim. Turning to Susman’s claim it was subjected to unfavorable treatment in retaliation for its protected speech, the court found clear the order was issued in response to Susman’s First Amendment protected activities. The order, the court observed, explains that it was motivated by Trump’s concerns that Susman “spearheads efforts to weaponize the American legal system and degrade the quality of American elections”; “funds groups that engage in dangerous efforts to undermine the effectiveness of the United States military through the injection of political and radical ideology”; and “supports efforts to discriminate on the basis of race.” Each of these, the court observed, is tied to activity protected by the First Amendment.

The parties agreed that the reference to weaponizing the American legal system and degrading the quality of American elections refers to Susman’s representation of Dominion Voting Systems and certain government officials in connection with litigation regarding the 2020 election. It is well established, said the court, that “advice from [an] attorney to [a] client and... advocacy by the attorney to the courts” is private speech that is protected by the First Amendment.

As to the order’s reference to the firm’s funding of “groups that engage in dangerous efforts to undermine the effectiveness of the United States military through the injection of political and radical ideology,” Susman understood, and the government appeared to agree, that this referred to a donation it made to GLBTQ Legal Advocates and Defenders, an organization that advocates for—among other things—the equal treatment of gay, lesbian, and transgender service members. Again, the court found it settled law that the political speech of corporations, including donations, is protected by the First Amendment.

Regarding the order’s accusation that Susman “engages in unlawful discrimination, including discrimination on the basis of race,” by administering a program offering financial awards and employment opportunities only to “students of color,” this is a cash prize, which does not include an offer of employment, and it is thus not covered by Title VII.

Retaliatory action. Susman also amply demonstrated that the government’s actions were “sufficient to deter a person of ordinary firmness in plaintiff’s position from speaking again,” the court stated, noting that it previously granted the firm’s motion for a TRO because of the irreparable harm that it anticipated would befall it in the absence of relief. That preliminary finding, said the court, was “further validated by the efforts of several other peer law firms to avoid precisely the consequences that have befallen Susman here.”

Causal link. There was also sufficient evidence to find a causal link between Susman’s exercise of a constitutional right and the adverse action taken against it. The order’s “three stated reasons for enactment all hinge on Susman’s protected speech, and nothing in the Order or its accompanying fact sheet suggests that there is any other governmental interest that may be served if the Order is permitted to take effect,” the court explained, finding the order “constitutes unlawful retaliation against Susman for activities that are protected by the First Amendment, including its representation of certain clients, its donations to certain causes, and its expression of its beliefs regarding diversity.” Accordingly, Susman was entitled to summary judgment on its free speech claims.

Freedom of Association. Susman also argued that Section 3’s requirement that agencies require “[g]overnment contractors to disclose any business they do with Susman and whether that business is related to the subject of the Government contract” and its directive to agency heads to review and “take appropriate steps to terminate” “all contracts with Susman or with entities that disclose doing business with Susman” is intended to chill Susman’s clients’ freedom of association. Here, the court found it would be “hard-pressed to agree with Defendants that the compelled-disclosure requirement is ‘narrowly tailored to Section 3’s stated goal’” as Section 3 requires the disclosure of “any business” that any government contractor does with Susman, even if that business has nothing to do with the firm. Thus, the court granted summary judgment to Susman on this claim, too.

Right to petition. The court also agreed that “the Order’s provisions punishing Susman for past petitioning activity and restricting Susman’s ability to petition federal employees and appear before federal agencies on federal property,” as well as in federal courts, was clearly violative of the First Amendment. “Restrictions that prevent lawyers from entering federal buildings, interacting with agency officials, and even entering courthouses plainly constitute a ‘significant impairment’ of Susman’s right to petition the government,” the court stated. Finding no legitimate governmental interest in abridging Susman’s right to petition because it engages in disfavored speech, the court found it was also entitled to summary judgment on this claim.

Separation of powers. Turning to the firm’s argument that the order violates separation-of-powers principles because it “tak[es] action for which the Executive Branch has no constitutional or statutory authority whatsoever,” and because it unlawfully encroaches on the purview of the judiciary, the court found that the order did not draw on an executive power that has been designated to the President by the Constitution or statute and it improperly seizes authority that the Constitution grants to the judiciary. Thus, the court granted summary judgment to Susman on this claim as well.

Permanent injunction. Finally, granting Susman’s request for a permanent injunction, the court found that Susman and its clients suffered constitutional violations, which, in the absence of the TRO, would be ongoing. Susman also suffered reputational harms that are not monetarily reparable and that would continue if the court did not enter a permanent injunction. Further, said the court, Susman would suffer significant monetary harm if the injunctive relief were curtailed. All these harms, said the court, are irreparable.

In addition, the court stated, the “Order goes beyond violating the Constitution and the laws of the United States. The Order threatens the independence of the bar—a necessity for the rule of law.” Thus, the court found the balance of the equities and the public interest weighed overwhelmingly in favor of granting the permanent injunction. Accordingly, it granted the firm’s request for declaratory and injunctive relief.

The case is No. 25-1107 (LLA).

Judge: Alikhan, L.

Attorneys: Bethany Woodard Kristovich (Munger, Tolles & Olson) for Susman Godfrey LLP. Richard Lawson, U.S. Department of Justice, for Executive Office of the President.

Companies: Susman Godfrey LLP

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