Free Speech Concerns Lead to Injunction Against Federal DEI Restrictions

Last week, a federal court put the brakes on two executive orders aimed at ending federal support for Diversity, Equity, and Inclusion (DEI) programs. Citing First Amendment concerns, the court issued a temporary injunction against the U.S. Department of Labor’s enforcement of key provisions affecting DEI-related speech and activity.

Here’s what happened—and why it matters for employers and HR professionals working with federal grants.

The Backstory

The plaintiff, a nonprofit supporting women in the skilled trades, receives substantial federal funding. After President Trump signed Executive Order 14151 and Executive Order 14173 in January, federal agencies—including the Department of Labor—directed grantees to immediately cease DEI-related activities. One of the nonprofit’s partners canceled its subcontract, citing the orders.

The Court’s Ruling

The court found that the nonprofit faced real, imminent harm—including canceled funding, partner withdrawals, and pressure to strip DEI language from its materials. It concluded that the executive orders likely violated the First Amendment by creating a chilling effect on speech.

The judge noted that the government had failed to define what counted as “DEI” or explain how such programs might violate existing anti-discrimination laws. As a result, organizations were left to guess what was allowed and what wasn’t—leading many, like the plaintiff and its partners, to preemptively scale back or censor their work to avoid losing funding.

“The Court concludes that the [executive order] is likely a coercive threat…selectively targeting speech regarding DEI, DEIA, and equity based on a belief that such programs are ‘immoral,’ i.e., disfavored by the government.”​

The court emphasized that this vagueness—combined with credible threats of enforcement—was enough to justify emergency relief.

How Far Does the Injunction Go?

The court blocked two provisions, but not equally:

Nationwide Injunction (Certification Provision)
The court barred DOL from enforcing the requirement that grantees certify they don’t operate any DEI-promoting programs—even outside of their grants. This applies nationwide to all DOL grantees.

Limited Injunction (Termination Provision)
The mandate to cancel “equity-related” grants is blocked only for:

• The nonprofit that sued, and
• Any grantee through which it holds a subcontract (e.g., Jobs for the Future).

Other DOL grantees remain subject to this provision.

What Employers Should Do Now

This Isn’t Over—An Appeal Is Likely
The court’s ruling is temporary and could be challenged. Employers shouldn’t assume these restrictions are permanently off the table.

Be Cautious—but Don’t Overcorrect
Parts of the orders are still active. Avoid reflexively scaling back DEI programs, but pause on expanding federally funded initiatives until there’s more clarity.

Review Grant Terms and Monitor Updates
Audit your federal awards to identify potential exposure. Consult outside counsel and monitor any ongoing litigation.

Bottom Line

This ruling adds legal uncertainty for DEI programs tied to federal funds. Some provisions are paused, others remain in effect, and more litigation is likely. Employers should review grant language, avoid hasty decisions, and stay prepared to adjust as legal developments unfold.