Federal District Court Enjoins DOL Implementation of Federal Contractor DEI Certification Requirement

On April 15, 2025, the U.S. District Court for the Northern District of Illinois issued a preliminary injunction enjoining the U.S. Department of Labor ("DOL") from implementing certain provisions of President Trump's January 20 and January 21 Executive Orders related to diversity, equity, inclusion, and accessibility ("DEI" or "DEIA") on First Amendment and separation of powers grounds. Specifically, the court blocked the DOL from enforcing requirements that federal contractors certify that their compliance with federal anti-discrimination laws is material for purposes of the False Claims Act, and that they do not operate "any programs promoting DEI." The court also halted the termination of an "equity-related" grant related to the Women in Apprenticeship and Nontraditional Occupations ("WANTO") Act.

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In Chicago Women in Trades v. Trump, a non-profit organization, Chicago Women in Trades ("CWIT"), challenged several provisions of President Trump's January 20 and January 21 DEI-Related Executive Orders, which we previously discussed here. The challenged provisions include:

• The "Certification Provision," which requires all federal grants and contracts to include terms requiring that the contractor or grantee (i) "agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government's payment decisions for purposes of [the False Claims Act]"; and (ii) "certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws."
• The "Termination Provision," which requires all federal agencies to "terminate . . . 'equity-related' grants or contracts."

The court held that CWIT would likely be able to prove that the Certification Provision violates the First Amendment because it "attempts to regulate grantees' speech outside of their federally-funded programs." The court wrote that "[t]he provision on its face makes clear that a counterparty must certify that it does not operate any program that promotes DEI, irrespective of whether the program is federally funded." The court further found that the vagueness of the Certification Provision requires grantees to make an "impossible" choice: "decline to make a certification and thus lose their grants, or risk making a certification that will be deemed false."

As for the Termination Provision, the court held that CWIT would be unlikely to prove that the Termination Provision violates the First Amendment right to engage in protected speech and expressive conduct, or that it is impermissibly vague under the Fifth Amendment. The court did hold, however, that CWIT would likely to be able to prove that the application of the Termination Provision to one of CWIT's five federally funded grants violated separation of powers principles. Specifically, in the WANTO Act, "Congress expressly stated . . . that the Executive 'shall' award grants for projects impacting women" and required the "DOL to issue equity-related grants." By "expressly requiring" a "wholesale termination" of all equity-related grants, the included termination by the DOL of a WANTO grant would "bypass Congress's condition and policy goal," according to the court.

Accordingly, the court issued a nationwide injunction against the DOL's enforcement of the Certification Provision. As for the Termination Provision, the court found it "appropriate to issue a preliminary injunction precluding DOL from terminating CWIT's WANTO grant funds," but otherwise did not issue a broader injunction. This comes on the heels of the U.S. District Court for the District of Maryland's issuance of a preliminary injunction against the Certification and Termination Provisions in National Association of Diversity Officers in Higher Education v. Trump, which we discussed here, although that injunction was stayed on March 14, 2025, pending the government's appeal.

Employers should continue to closely monitor the changing political and legal landscape in this area. The government is expected to appeal.