Federal District Court Temporarily Enjoins DEI Certification Provision for DOL Grant Recipients

On March 27, 2025, a judge for the Northern District of Illinois granted a temporary restraining order (TRO) against the DEI Certification and Termination Provisions authorized by President Trump’s Executive Orders 14151 and 14173. The Certification Provision TRO is nationwide with respect to Department of Labor grant recipients. The Termination Provision TRO is limited to the plaintiff and any federal grantee through which plaintiff holds a subcontract or is a subrecipient of federal funds. Although the opinion and the resulting TRO is thus limited in scope, it provides guidance as to how federal contractors and other recipients of federal funds might pursue relief from the president’s anti-DEI directives.

The plaintiff is Chicago Women in Trades (CWT), a nonprofit established in 1981 with a mission to advocate for women seeking to enter and thrive in occupations historically dominated by men, including skilled labor positions in construction. Federal funding accounts for approximately 40% of CWT’s annual budget. 

CWT challenges the following provisions in Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing and Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity for violating its rights under the First and Fifth Amendments to the Constitution and for running afoul of the Constitution’s Spending Clause and the separation of powers:¹

• Executive Order 14151 § 2(b)(i) (the “Termination Provision”) mandates each agency within 60 days “terminate, to the maximum extent allowed by law, . . . all . . . “equity-related” grants or contracts.”
• Executive Order 14173 § 3(b)(iv) (the “Certification Provision”) mandates each agency include in every contract or grant award a certification “that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws” and thus such certification be “material” for purposes of the False Claims Act.

In a 24-page memorandum, the judge found that the plaintiff had standing to challenge the Termination and Certification Provisions and the issues were ripe for review. The judge held the plaintiff was likely to prevail in challenging the Termination Provision for violating its First Amendment rights because of its coercive, vague threat. The court notably reasoned:

At base, though, it seems that if the full range of the Termination Provision's applications is undefined such that it chills any protected speech that might touch upon whatever the government now contends to be "DEI," "DEIA," or "equity," then the full range of the provision's applications would be constitutionally impermissible.

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The Order provides no definition or even an example of what is considered "illegal DEI" that would be permissibly terminated, and the government has been unwilling or unable to clear it up during this litigation. Therefore, limiting termination to the maximum extent allowed by law offers no real protection, as the extent to which CWIT's programs may violate the law remains unclear.

The court also held the plaintiff was likely to prevail on the merits in challenging the Certification Provision because the Certification Provision attempts to regulate speech outside of federally funded programs (“any programs promoting DEI” irrespective of whether the program is federally funded) and the Certification is entirely vague. The court explained that the meaning of the Certification Provision:

. . . is left entirely to the imagination. The Order that contains the Certification Provision does not define the term "DEI" itself, and it does not refer to any other source indicating what the term means as used in the Order—let alone what might makes any given "DEI" program violate Federal anti-discrimination laws. And although the government emphasized, both in its brief and at oral argument, that the Certification Provision implicates only illegal DEI programs, it has studiously declined to shed any light on what this means. The answer is anything but obvious. Indeed, the thrust of the Orders is that the government's view of what is illegal in this regard has changed significantly with the new Administration—even though the government has not (in the Orders) and has been unwilling to (in its briefs or at argument) define how it has changed.

The court aptly described the “difficult and perhaps impossible position” contractors and grant recipients are put in:

CWIT or any other grantee must either take steps now to revise their programmatic activity so that none of it "promote[s] DEI" (whatever that is deemed to mean), decline to make a certification and thus lose their grants, or risk making a certification that will be deemed false and thus subject the grantee to liability under the False Claims Act.

As a result, and after finding a likelihood of irreparable harm and balancing the harms and the public interest, the court granted the temporary restraining order regarding the Termination and Certification Provisions. 

This temporary restraining order’s scope is distinct from and narrower than the injunction issued by a Maryland federal court a little more than a month ago and then stayed by the Fourth Circuit two weeks ago. Unlike the District of Maryland preliminary injunction, this is not a nationwide injunction applying to all federal government agencies and protecting both grant recipients and federal contractors. Rather, the Certification Provision TRO is nationwide only with respect to DOL grant recipients, to “protect grantees who cannot afford the risks inherent in biting the hand that feeds them.” The Termination Provision TRO is limited to the plaintiff and any federal grantee through which plaintiff holds a subcontract or is a subrecipient of federal funds. 

A hearing on Chicago Women in Trades' motion for a longer-lasting injunction on these Certification and Termination Provisions is scheduled for April 10, 2025. This is only one lawsuit of several challenging President Trump's executive orders regarding DEI or DEIA programs. In these uncertain times, compliance is not always clear, so please contact experienced counsel when working through these issues.