A federal appeals court dealt the Department of Veterans Affairs a significant legal setback, ruling that the agency must continue honoring its AFGE collective bargaining agreement while litigation over the contract’s termination continues.
The First Circuit Court of Appeals issued its ruling on May 20th, finding that the VA cannot terminate its master collective bargaining agreement with the American Federation of Government Employees National Veterans Affairs Council while the underlying lawsuit proceeds. The contract covers approximately 300,000 VA employees, including nurses, doctors, and other clinical and administrative staff.
How We Got Here
The dispute traces back to August 2025, when VA Secretary Doug Collins terminated the AFGE collective bargaining agreement, a contract that had a three-year term and could only be amended by mutual consent, citing a March 2025 executive order from President Trump that eliminated collective bargaining rights at agencies deemed to have national security functions.
AFGE challenged the termination in federal court. In March 2026, U.S. District Judge Melissa DuBose issued a preliminary injunction ordering the VA to reinstate the contract, finding that the agency had likely violated the First Amendment and the Administrative Procedure Act. Critically, she noted that the VA had not cited national security concerns when it terminated the agreement, instead citing cost and performance management issues, undermining the legal basis for using the executive order as justification.
What followed was a prolonged standoff. The VA said it restored the contract on paper but continued denying employees the benefits and workplace protections it provided. Judge DuBose called the VA’s conduct a “blatant disrespect” for her ruling and issued a second enforcement order in April requiring the agreement to be honored in both form and substance. The Justice Department then appealed to the First Circuit.
What the Appeals Court Said
The First Circuit upheld the lower court’s enforcement order, meaning the AFGE collective bargaining agreement remains in effect and binding on all covered employees. The court made clear that all parties covered by the agreement will continue to be covered until it is terminated or amended through lawful means.
The court did narrow the ruling in one respect, pausing requirements related to processing all pending grievances and arbitration matters under the agreement while the appeal continues. But the core protection of the contract itself remains intact.
The Broader Picture
This ruling stands in contrast to a February decision from the Ninth Circuit Court of Appeals, which vacated a nationwide injunction blocking the executive order and found that the administration’s actions were not retaliatory toward unions. The split between the two circuits creates a complicated legal landscape that is likely to continue playing out in the courts for the foreseeable future.
For VA employees covered by the AFGE collective bargaining agreement, yesterday’s ruling means their workplace protections remain in place for now, though the legal battle over the executive order’s broader reach is far from over.
