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Federal Judge Blocks Mass Layoff Plans

Dailyfed Staff

May 13, 2025

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On May 9, 2025, U.S. District Judge Susan Illston in San Francisco issued a 14-day temporary restraining order, halting the Trump administration’s sweeping plans to lay off tens of thousands of federal workers across more than 20 agencies. The ruling, effective until May 23, prevents agencies from issuing reduction-in-force (RIF) notices, disrupting a major executive branch overhaul led by the Department of Government Efficiency. The decision marks a significant setback for President Trump’s efforts to downsize the federal workforce.

The order stems from a lawsuit filed on April 28 by a coalition of federal employee unions, nonprofit organizations, and local governments. The plaintiffs argued that the president’s February executive order, along with directives from the Office of Personnel Management (OPM) and the Office of Management and Budget (OMB), violated constitutional and statutory limits by restructuring agencies without congressional approval. Illston agreed, stating in her 42-page ruling that while presidents can pursue policy changes, “large-scale overhauls of federal agencies” require collaboration with Congress.

The restraining order applies to a wide array of agencies, including the Departments of Agriculture, Commerce, Energy, Health and Human Services, Housing and Urban Development, Interior, Labor, State, Transportation, Treasury, and Veterans Affairs, as well as AmeriCorps, the Environmental Protection Agency, the General Services Administration, the National Labor Relations Board, the National Science Foundation, the Small Business Administration, and the Social Security Administration. These agencies had begun or were poised to implement significant layoffs.

Illston highlighted the potential harm the layoffs could cause to citizens as well as the impact of widespread termination of salaries and benefits for individuals, families, and communities. The Trump administration defended the layoffs, arguing that the executive order and subsequent OPM and OMB memos provided only general guidance, allowing agencies to make independent decisions. Illston rejected these arguments, noting that evidence showed agencies were acting under direct presidential instructions, not independent judgment. She further ruled that neither OPM, OMB, nor DOGE has statutory authority to mandate mass terminations, with DOGE lacking any legal basis whatsoever.

Illston emphasized the need to preserve checks and balances, stating, “Federal courts should not micromanage the vast federal workforce, but courts must sometimes act to preserve the proper checks and balances between the three branches of government.” She pointed out that Trump, during his first term, had sought congressional approval for similar reorganizations but failed to do so this time.

Agencies must now submit their proposed and approved RIF plans to the court by May 13, 2025. A hearing on May 22 will determine whether a longer-lasting preliminary injunction is warranted. Meanwhile, the Trump administration has appealed the ruling to the 9th Circuit Court of Appeals, signaling ongoing legal battles over executive authority.

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