On June 10, 2026, Maryland Attorney General Anthony Brown, California Attorney General Rob Bonta, and Illinois Attorney General Kwame Raoul co-led a coalition of 20 attorneys general in suing the Trump Administration over the addition of new terms to federal contracts that — in the name of purging “diversity, equity, and inclusion” (DEI) — impose unclear and confusing requirements on federal contractors and subcontractors. These terms depart from antidiscrimination policies that contractors have followed for many decades. The Trump Administration also threatened severe penalties on federal contractors that do not comply, yet failed to provide adequate notice of what is prohibited. 

In their lawsuit, the coalition challenged the federal agencies’ rushed implementation of President Trump’s Executive Order No. 14398. The executive order, issued March 26, 2026, directs federal agencies to adopt new contract terms prohibiting federal contractors, including state agencies and instrumentalities, from engaging in “racially discriminatory DEI activities” in connection with their contract work.    

In implementing the executive order, federal agencies failed to follow required procedures designed to promote good government. For example, the agencies failed to provide a statutory notice and comment period. Largely because of these shortcuts, contractors have no clear guidance on what the new contract terms require in practice, or whether or how the new requirements differ from existing laws that already prohibit racial discrimination. Contractors that fail to comply face severe penalties, including cancellation of their contracts, exclusion from all future federal contracts, and lawsuits under the False Claims Act. The vague and confusing contract terms impose needless costs on contractors and threaten to chill lawful efforts to prevent, detect, and remedy discrimination.   

Coalition states and their agencies regularly contract with the federal government. The coalition states collectively hold existing federal contracts worth billions of dollars. Federal agencies began adding the new terms into contracts in April 2026 and have been directed to modify existing contracts by July 24. The federal government estimates the order could affect as many as 640,000 contracts and subcontracts nationwide, including more than 160,000 contracts with over 34,000 unique vendors.   

The coalition alleges that the federal agencies implementing the executive order violated the Administrative Procedure Act (APA) , exceeded their legal authority, and neglected to adequately explain or justify the new requirements. The lawsuit asks the court to hold the agencies’ actions unlawful and enjoin the agencies from imposing the new contract terms.    

These new contract terms were imposed without public input, without clear guidance, and without explanation of how they differ from anti-discrimination laws that have been on the books for decades. These poorly defined mandates cause confusion for contractors like Maryland’s State agencies and universities. We’re filing this lawsuit to restore the proper standards and process that contractors deserve and the law requires.Attorney General Anthony Brown