This executive order was issued to curtail to the maximum extent of the law all DEI initiatives within the federal government and among federal contractors. Specifically, it is aimed at ending practices that promote race, sex and other identity-based preferences in hiring, training and contracting decisions. The director of the Office of Management and Budget (OMB) was directed to effectuate the removal of these programs and to terminate to the maximum extent allowed by law all equity-based grants or contracts. Federal agencies and departments are to provide the director of the OMB a list of federal contractors who have provided DEI training or DEI training materials to federal agency/department employees and federal grantees who received federal funding to provide or advance DEI programs, services or activities since Jan. 20, 2021. The purpose for which these lists will be used is unclear, but the federal contractors who have provided such training and the grantees that received funding need to be aware of these provisions.

On Feb. 21, 2025, a federal district court in Baltimore enjoined the provision in this executive order which directed executive agencies to terminate equity-related grants or contracts. That injunction has been stayed pending appeal by the U.S. Court of Appeals for the Fourth Circuit. On Feb. 20, 2026, the Fourth Circuit vacated the district court’s preliminary injunction and remanded the case to the trial court for further proceedings. A federal district court in San Francisco enjoined the same provision, and this executive order has been challenged in federal district courts in Washington, D.C., Illinois and Pennsylvania.