Chicago Federal District Court Issues Targeted Order Enjoining Department of Labor from Presenting DEI Certifications to Federal Contractors and Grant Recipients

Seyfarth Synopsis: On March 27, 2025, a federal district court in Chicago issued a temporary restraining order (TRO) blocking the Department of Labor from implementing key provisions from two of President Trump’s Executive Orders issued in January. Although the plaintiff sought a broad nationwide injunction against the entire federal government, the Chicago district court’s TRO only enjoins DOL. The Chicago district court's March 27 TRO comes just two weeks after the Fourth Circuit’s March 14, 2025 decision that had allowed federal agencies to resume requiring DEI certifications after lifting an earlier nationwide injunction. As these legal challenges and appeals move through the courts, federal contractors and grantees face continued uncertainty regarding their certification obligations.

The March 27, 2025 TRO and Memorandum Opinion were issued by Judge Matthew F. Kennelly of the U.S. District Court for the Northern District of Illinois, in Chicago Women in Trades v. Trump et al., No. 25-cv-02005, a lawsuit brought by Chicago Women in Trades (“CWIT”), a non-profit organization that promotes diversity, equity, and inclusion within the skilled trades industry. CWIT challenged specific provisions of Executive Order 14151 (“Ending Radical and Wasteful Government DEI Programs”) signed on January 20, 2025, and Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”) signed on January 21, 2025. (We previously wrote separate Management Alerts about the January 20 and January 21 Executive Orders.)

The Court’s TRO focuses on two provisions from President Trump’s January 2025 Executive Orders: The “Termination Provision” from EO 14151 (signed on January 20) that directs federal agencies to “terminate... all... ‘equity-related’ grants or contracts” and the “Certification Provision” from EO 14173 (signed on January 21) which requires contractors and grantees to certify both that “compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” for False Claims Act purposes, and that “it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”

The scope of the Court’s TRO is nationwide, and specifically prohibits DOL – and only DOL – from requiring any federal contractor or grantee to make certifications relating to their DEI programs under the Executive Orders. The remaining provisions of the TRO are narrower in scope, and they only affect CWIT by prohibiting DOL from terminating CWIT’s grants and from bringing False Claims Act enforcement actions against CWIT based on the certification requirement. The TRO does not enjoin DOL from terminating other organizations’ grants based on the Executive Orders, or from bringing False Claims Act enforcement actions. It also does not prevent other federal agencies from requiring DEI-related certifications from their contractors and grantees.

CWIT requested that the Court issue a nationwide injunction against the entire federal government that would prohibit “any and all federal agencies from taking action adverse to a federally funded contract, grant, or other implementing vehicle” (CWIT Motion at 18). In determining the appropriate scope of the injunction he was granting, Judge Kennelly explained that he was limiting the scope only to DOL “and not other defendants” because “it is with regard to DOL that CWIT has shown a risk of imminent harm.” (Memorandum Opinion at 23).

The limited scope of TRO creates a complex situation in which DOL cannot require DEI-related certifications, but other federal agencies remain free to implement these same requirements. Notably, the Court declined to extend the injunction even to other named defendants in the case, such as the Department of Justice.

Substantive Reasoning Supporting Issuing the TRO

The Court’s 24-page opinion supporting the issuance of the March 27 TRO first finds the Executive Orders to be unconstitutionally vague, a problem that raises due process and First Amendment implications. The opinion pointed to the government’s lack of clarity regarding what constitutes “illegal” DEI programs, writing:

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. (Memorandum Opinion at 18.)

Additionally, the Court discussed how the vagueness of the executive orders impermissibly chilled protected speech because the lack of clear definitions causes speakers to “steer far wider of the unlawful zone . . . than if the boundaries of the forbidden area were clearly marked.” (Memorandum Opinion at 15-16.) The Court reasoned that this vagueness implicates First Amendment protections by creating “self-censorship pressure” out of concern for potential funding termination or False Claims Act liability. (Memo. Op. at 7.)

The March 27 TRO and Other Litigation

The lawsuit filed by CWIT is just one of several federal court challenges currently working their way through the federal court system. Other pending cases include Nat’l Ass’n of Diversity Officers in Higher Educ. v. Trump, No. 25-1189 (4^thCircuit) (also challenging Eos 14151 and 14173); National Urban League et al. v. Trump et al., D.D.C., Case No. 25-cv-00471 (challenging EOs 14151, 14168, and 14173); San Francisco AIDS Foundation et al. v. Trump et al., D.D.C., Case No. 25-cv-1824 (challenging EOs 14151, 14168, and 14173); and Shapiro et al. v. U.S. Department of the Interior et al., E.D. Pa., Case No. 25-cv-763 (challenging EOs 14151 and 14173 among others). As these cases progress through the federal courts and different circuit courts of appeal, conflicting results are a distinct possibility.

As we analyzed previously, on March 14, 2025, the Fourth Circuit issued a decision allowing federal agencies to resume requiring DEI certifications, staying a Maryland district court’s earlier nationwide injunction. The Fourth Circuit has ordered expedited briefing for the full appeal, with the government's opening brief due by April 8, 2025, and the plaintiffs' response brief due by May 8, 2025.

In the CWIT case, a preliminary injunction hearing has been set for April 10, 2025. We expect the Supreme Court may eventually be called upon to review these issues.

Where Things Stand For Now

The landscape surrounding federal contractor and grant recipient certifications continues to evolve rapidly. Federal contractors and grantees being presented with certification requirements should immediately consult with counsel about how to respond given this complex and shifting legal environment.

Employers should continue to pay attention to developments in litigation challenging These Executive Orders, and be prepared for continued uncertainty as courts grapple with the substantive and procedural issues.

Seyfarth Shaw will continue to monitor these developments and provide updates as they occur. For more information on how these changes may affect your workplace policies and compliance obligations, please contact any of the authors, a member of Seyfarth's People Analytics team, or any Seyfarth attorney with whom you regularly work.