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Attorney General William Tong today joined a coalition of 20 attorneys general in suing the Trump administration over the addition of new terms to federal contracts that eliminate “diversity, equity, and inclusion” (DEI) from federal contracting.

The coalition believes the move imposes "unclear and confusing requirements on contractors that may depart from anti discrimination policies that contractors have followed for decades, and threaten severe penalties on federal contractors without adequate notice of what is prohibited."

President Trump’s Executive Order No. 14398, 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.   

This means "activities in which employees, applicants, or contracting parties are treated differently, separated, or singled out based on their race or ethnicity, rather than treated equally and objectively based on their merit and without regard to their immutable characteristics."

The White House called DEI activities "unethical" and "often illegal," adding they also "cause inefficiencies, waste, and abuse within entities that engage in such practices."  

It said DEI activities further "impose artificial costs in hiring, promotion, and operations by precluding implementation of merit-based principles; creating excessive workforce turnover by elevating immutable characteristics over job performance; and jeopardizing the sort of employee collaboration and problem-solving that is essential to fostering efficient and high-quality work." 

DEI activities also "create unnecessary costs by reducing the pool of available labor by artificially limiting companies to hiring or promoting certain individuals, suppliers, or intermediaries based on their race or ethnicity." 

The Trump Admin argues these costs are passed onto the Federal Government when it contracts with companies that engage in racially discriminatory DEI activities, or who use subcontractors who do so. As such, the policy of the United States going forward is to "promote economy and efficiency in Federal contracting by preventing racial discrimination."

Tong's response was typical.

“No one has any clue what this executive order requires, except that federal contractors and states stand to lose billions of dollars in contracts if we don’t pass some magical MAGA litmus test. Everyone knows that the Trump administration deploys the term ‘DEI’ as a racist dog whistle. We’re suing to prevent Trump from using this vague and offensive order to penalize and defund Connecticut,” said Attorney General Tong.

In their lawsuit, filed in the U.S. District Court for the District of Maryland, Attorney General Tong and the coalition challenge the federal agencies’ implementation of the executive order, alleging federal agencies took shortcuts around regular procedures designed to promote good government.

For example, the coalition argues that the agencies "failed to invite comments from the public as required by law" and now "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 penalties, including cancellation of contracts, exclusion from all future federal contracts, and lawsuits under the False Claims Act.

The coalition says the "vague and confusing contract terms impose needless costs on contractors and threaten to chill lawful efforts to prevent, detect, and remedy discrimination."

The coalition alleges that the federal agencies implementing the executive order violated the Administrative Procedure Act (APA) by failing to provide notice to the public or accept comments (as required by federal procurement law), exceeding their legal authority, and neglecting 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.  

Joining Attorney General Tong in filing the lawsuit are the attorneys general of California, Colorado, the District of Columbia, Hawaiʻi, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.

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