On March 27, 2025, the United States District Court for the Northern District of Illinois granted a nationwide temporary restraining order (TRO) preventing the Department of Labor (DOL) from requiring federal contractors and grant recipients to certify that they do not operate any diversity, equity, and inclusion (DEI) programs that violate the Trump Administration’s recent DEI related Executive Orders.

The Chicago Women in Trades (CWIT), a national nonprofit organization dedicated to advancing opportunities for women in skilled construction trades, recently filed a lawsuit challenging provisions of Executive Order 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) and Executive Order 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity). Specifically, CWIT challenged aspects of the Executive Orders that gave the U.S. Department of Labor (DOL) authority to terminate “equity-related” contracts and grants (the “Termination Provision”) and require grant recipients to certify, pursuant to the False Claims Act, that they do not operate any programs that would violate the DEI Executive Orders (the Certification Provision).

Federal funding accounts for roughly 40% of CWIT’s annual budget, and the group received several grants from the DOL. CWIT argued that the Termination Provision violated its First Amendment right to engage in protected speech by using its grants to implement its mission of promoting women-focused apprenticeship and training programs. It also argued  that the Certification Provision unlawfully regulates speech outside of federally funded programs by prohibiting organizations from engaging in “any programs promoting DEI,” regardless of whether the program is federally funded.

On March 27, in a 24-page memorandum, Judge Matthew Kennelly temporarily granted CWIT’s request for a TRO. The Court found the Executive Orders to be unconstitutionally vague and that CWIT was likely to prevail on their First Amendment challenges to both the Termination and Certification Provisions. Specifically, the Court held that the “Certification Provision implicates only illegal DEI programs” and the government “has studiously declined to shed any light on what this means. The answer is anything but obvious.” Further, “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.”

As to the Certification Provision, the Court issued a nationwide TRO prohibiting the DOL from requiring any federal contractor and grant recipient to make certifications related to their DEI programs under the Executive Orders. As to the Termination Provision, the Court issued a more narrow TRO, specifically prohibiting the DOL from terminating CWIT’s grants and from bringing False Claims Act enforcement actions against CWIT.

Critically, the nationwide Certification Provision TRO only applies to actions by the DOL. For the time being, other agencies remain free to enforce the Certification Provision. The March 27 ruling also does not prohibit the DOL or other federal agencies from enforcing the Termination Provision against other federal contractors or grant recipients—in other words, the Termination Provision TRO was narrowly applied to only CWIT, and does not have nationwide effect.

A preliminary injunction hearing was held on April 10, 2025, to determine if the TRO as to the nationwide Certification Provision or the CWIT-specific Termination Provision will be extended. Based on the Judge’s comments at the hearing, the outcome is not clear.  For example, the Judge asked, “How is this different than saying the government has to keep funding this particular form of work, even though it doesn’t think it’s a good idea anymore?”  For the time being, employers, especially federal contractors or those who are federal grant recipients, should continue to consult with legal counsel to determine their current compliance obligations.

Ballard Spahr’s Labor and Employment Group frequently advises employers on issues related to labor employment and policy. Outside of the TRO, we regularly work with our clients to formulate employer and/or contract-specific defenses to a federal agency’s attempts to enforce the Executive Orders’ Certification and Termination provisions. We will continue to monitor the new administration’s agenda and the impact of further anti-discrimination laws and interpretation. Please contact us if we can assist you with these matters.