Northern District of Illinois Becomes Latest Court to Block President Trump’s DEI Executive Orders

As we have reported, President Trump’s Executive Orders 14151 and 14173 targeting diversity, equity, and inclusion (“DEI”) programs (the “DEI Orders”) have resulted in considerable legal activity addressing the constitutionality of the DEI Orders. Our recent updates are available here:

• March 20, 2025: EEOC and DOJ Issue New Guidance Addressing DEI in the Workplace
• March 18, 2025: Fourth Circuit Lifts Preliminary Injunction on Executive DEI Orders
• March 4, 2025: AGG Talks: Solving Employers’ Problems Podcast — What Employers Need to Know About DEI Policy Changes Under the Trump Administration
• February 26, 2025: The Ongoing Battle Between Judicial and Executive Power: The District Court of Maryland Enjoins President Trump’s DEI Orders on a Nationwide Basis
• February 19, 2025: Federal Government Contractors May No Longer Have 90 Days to Comply With Trump Administration’s DEI Executive Order
• February 13, 2025: Update on Legal Challenges to President Trump’s Presidential Actions
• February 5, 2025: President Trump’s Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” and Its Impact on Private Employers

After the United States Court of Appeals for the Fourth Circuit rescinded a nationwide injunction on the DEI Orders on procedural grounds only, the U.S. District Court for the Northern District of Illinois on March 27, 2025, issued a preliminary injunction against two key provisions of the DEI Orders with respect to programs within the federal government and for federal contractors. Specifically, the district court’s ruling enjoins the Department of Labor (“DOL”) from nationwide enforcement of the Certification Provision of the DEI Orders, which requires federal contractors to certify that they do not operate any programs promoting DEI and that violate applicable federal anti-discrimination laws. The district court also blocked the DOL from enforcing the Termination Provision, which allows the government to withhold federal funding from organizations that fail to comply with the DEI Orders, but only for the named plaintiff, the Chicago Women in Trades (“CWIT”).

Background of the Lawsuit

CWIT, a nonprofit organization focused on advancing opportunities for women in the skilled trades industry, sought to enjoin the DEI Orders after receiving multiple emails from the DOL, including from the grant administrator of the federal program in which CWIT participated, regarding CWIT’s need to comply with the DEI Orders. In addition to the prospect of future enforcement, e.g., by the DOL, CWIT also received a communication from a contractor with which it subcontracted informing CWIT that it was suspending CWIT’s work, citing directly to the DEI Orders as the basis for the contractor’s decision. CWIT then filed suit against the DEI Orders citing to the imminent injury caused from the loss of its business.

The District Court’s Opinion and Order

The district court first determined that CWIT had standing to challenge the Certification and Termination Provisions of the DEI Orders, citing to this threat of imminent injury. Specifically, the district court cited to CWIT’s programs promoting employment opportunities for women and its strong belief that its conduct might be targeted by the government, especially in light of CWIT receiving credible threats of enforcement and the actual termination of its above-referenced subcontract. The district court also referenced CWIT’s alleged pressure to self-censor in response to the DEI Orders, despite receiving no guidance as to how to ensure compliance with applicable law.

The district court then found that CWIT’s pre-enforcement challenge under the First Amendment was ripe for review, notwithstanding the lack of actual government action, because “every day that passes increases the risk of termination of its grants and, correspondingly, increases the pressure to self-censor its speech.” The district court rejected the government’s argument that only illegal actions are prohibited, because the DEI Orders do not define “DEI” or what “DEI programs” are illegal.

On the merits, the district court concluded that the government cannot use the threat of legal sanctions (“to the maximum extent allowed by law”) to suppress disfavored speech, ruling that the Termination Provision is a coercive threat to terminate funding unless a grantee brings its conduct into line with the government’s views of DEI. The district court then attacked the provision’s vagueness, noting that it is likely a grantee “would feel compelled to steer clear of a ‘forbidden area.’”

Attacking the Certification Provision, the court relied on the same vagueness of the DEI Orders, specifically the term “DEI,” and the government’s related refusal to shed light on what “illegal DEI programs” means. The district court also pointed to the DEI Orders’ reference to “programs promoting DEI” as an “express reference to First Amendment-protected speech and advocacy.” For these reasons, the District Court concluded that the DEI Orders had an impermissible chilling effect on speech, and that CWIT was likely to succeed on the merits of its claim challenging the Termination and Certification Provisions.

Given the district court’s conclusion that CWIT established a likelihood of success on its claims, the district court then determined that CWIT had made a sufficient showing of irreparable harm and that the balance of equities weighed in favor of granting a preliminary injunction. The district court then issued a nationwide injunction as to the Certification Provision, but limited that injunction only to the DOL, and not to other federal agencies. The district court also issued a limited injunction as to the DOL’s enforcement of the Termination Provision, but only with respect to CWIT’s grants and subgrants. Thus, the facial implications of the district court’s ruling are limited.

What Is Next?

Given the administration’s broader goals, it is inevitable that it will appeal the district court’s decision to the United States Court of Appeals for the Seventh Circuit. It is also inevitable that other businesses in situations analogous to CWIT will attack the DEI Orders and enforcement by other federal agencies, likely in forums that may be viewed as more favorable to those plaintiffs. Accordingly, the legal landscape remains fluid, and organizations should continue to stay informed about ongoing legal developments related to DEI policies and enforcement.

Employers should also continue to evaluate, including on a protected attorney-client privilege basis, company DEI programs and policies for potential non-compliance with existing legal precedent. Any employer that is a federal contractor will still have to certify compliance with applicable law, at least with respect to any program outside of the DOL’s purview. That certification is weighty given potential civil and criminal penalties under the False Claims Act, as the administration clearly is intending to raise the stakes associated with maintaining any semblance of a DEI program.

AGG is closely monitoring the progression of this case and other legal developments. If you have any questions about the DEI Orders or their effect on your business, please contact any member of the AGG Employment practice.