Attorney General Ellison sues Trump Administration over unlawful mandates on federal contractors

Joins coalition of 20 AGs in suing over illegal new additions to federal contracts intended to purge DEI; could affect 640K contracts nationwide

June 11, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison has joined 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) from federal contracting — impose unclear and confusing requirements on contractors that may depart from antidiscrimination policies that contractors have followed for decades, and threaten severe penalties on federal contractors without adequate notice of what is prohibited.

In the lawsuit, filed in the U.S. District Court for the District of Maryland, Attorney General Ellison and the coalition challenge 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 — from engaging in so-called “racially discriminatory DEI activities” in connection with their contract work.

In implementing the executive order, federal agencies took shortcuts around regular procedures designed to promote good government. For example, the agencies failed to invite comments from the public as required by law. 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.

“Another day, another end-run around the law by the Trump Administration,” Attorney General Ellison said. “In their ongoing pursuit of their perverse obsession with equating diversity, equity, and inclusion with illegal racial discrimination, they’ve broken the law once again and harmed Minnesota in the process. So once again, I’m joining this coalition to sue them to protect Minnesota and uphold the rule of law.”

The State of Minnesota and its agencies regularly contract with the federal government, and Minnesota and 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, 2026. 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.

At least two Minnesota state agencies — the Minnesota Department of Agriculture and the Minnesota Department of Veterans Affairs — receive key funding via contracts with federal agencies, as does the University of Minnesota.

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 block them from imposing the new contract terms.

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