[co-author: R. Edward Stone III]
The Most Recent Challenge To The Executive Order On DEI
On January 20, 2025, the Trump Administration signed Executive Order 14173 on “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Executive Order). The Executive Order seeks to end diversity, equity, and inclusion programs from both government and private sector workplaces.
This posting focuses on a recent challenge to the Executive Order by the Chicago Women in Trade (CWIT). The CWIT opposed, among other parts, the Certification provision of the Executive Order. That provision mandates that all companies awarded a federal grant certify to the governmental agency issuing the grant that it “does not operate any programs promoting DEI that would violate any applicable Federal anti-discrimination laws.” This Certification provision implicates the False Claims Act for any employer signing the Certification.
The False Claims Act And The Executive Order
The False Claims Act (FCA) is a Federal statute that sets criminal and civil penalties for defrauding the federal government. If a company operates any unlawful DEI programs and executes the certification attached to federal funding, that company may be subject to liability for violating the FCA. The issue for many employers is the vagueness of the Executive Order and lack of any definition of unlawful DEI. In other words, as argued in the CWIT case, companies are placed in the position of certifying compliance with federal law on DEI without being provided with a clear definition of DEI.
CWIT’s Challenge To The Executive Order
CWIT is an organization dedicated to “promoting diversity, equity, and inclusion within the skilled trades industry” by “preparing women across the country to enter and remain in high-wage skilled trades, including carpentry, electrical work, welding, plumbing, and others.” The organization received several notices from the State and Federal Departments of Labor warning against “unlawful DEI practices” and cautioned that grants would be terminated for companies acting inconsistent with the Executive Order. CWIT challenged the legality of the Executive Order in federal court.
The Court’s Decision
On March 26, 2025, the U.S. District Court for the Northern District of Illinois Eastern Division granted a temporary restraining order in favor of CWIT, finding that the organization was likely to suffer imminent injury based on the Certification provision. The temporary restraining order applies on a nationwide basis, pausing only the enforcement of the Certification provision in the Executive Order. This pause is limited to Certifications from the United States Department of Labor, and not any other federal or state agencies.
In granting the temporary restraining order, the Court noted that with the lack of any specific definition of DEI, “CWIT (and other grantees) [are] in a difficult and perhaps impossible position,” when confronted with a certification of compliance with the Executive Order as a condition of receipt of federal funding.
There’s a Temporary Restraining Order – Now What?
The CWIT case offers employers a temporary reprieve from the Certification provision in connection with grants and funding only from the federal Department of Labor. Employers, however, must still comply with the certification requirements to receive funding from other federal or state agencies.
The law in this area will change constantly over the next weeks and months as legal challenges to the Executive Order continue. It is important for employers receiving federal funding to remain informed in this area.
