If we all keep giving in to government stupidity that is all we'll ever get. This is a matter of personal integrity and reputation. Nobody should let any government agency impugn them. This is a slippery slope to slave status for all of us. By fighting this and winning it will make them think twice about doing this to another family.
You need to bring up the annual National Walk or Bike To Work Days. If the federal government promotes such a thing they why should any government agency tell people to not do it. What about the Presidents Council On Fitness, Sports, & Nutrition? Bring that up.
Fitness - President's Council on Fitness, Sports & Nutrition - President's Council on Fitness, Sports & Nutrition
Fight them and kick their butts!