Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—9th Cir.: Stay rejected in government’s attempts to layoff federal workers, (Jun 2, 2025)

By Todd Harrison, J.D.

“Neither the Constitution nor any federal statute grants the President the authority to direct the kind of large-scale reorganization of the federal government at issue.”

A divided Ninth Circuit panel upheld a district court’s preliminary injunction against the government’s attempts to layoff a broad swath of federal workers across a range of federal agencies. The court found that the government had yet to show a single piece of evidence to support its allegation of irreparable injury resulting from the district court’s temporary restraining order or preliminary injunction. Dissenting, Judge Callahan argued that the plaintiffs’ claims were not justiciable, and should have been brought before the Merit Systems Protection Board or the Federal Labor Relations Authority (American Federation of Government Employees, AFL-CIO v. Trump, No. 25-3293 (9th Cir. May 30, 2025)).

On February 13, 2025, President Trump issued Executive Order 14210 announcing a “critical transformation of the Federal bureaucracy.” The order instructed federal agencies to undertake preparations for large-scale reductions in force and directed each agency head to submit for approval an Agency RIF and Reorganization Plan (ARRP).

Lawsuit. In the wake of these changes, the plaintiffs—a collection of unions, nonprofit organizations, and local governments—filed suit against the government alleging that the executive order and the implementing ARRPs violated the constitutional separation of powers and the APA.

On May 9, the district court issued a TRO against the government and compelled discovery of the ARRPs and documents related to their implementation. The court then granted the plaintiffs’ request for a preliminary injunction. In response, the government requested an emergency stay of the preliminary injunction.

Irreparable injury. Turning to the factors governing stay requests, the court first considered whether the government had made a showing that it was likely to suffer irreparable injury absent a stay. The court found the government had failed to meet this threshold.

Noting that more than month had passed since the plaintiffs first filed their complaint, the court stated that the government had yet to show the district court “a single piece of evidence in support of its allegation of irreparable injury resulting from the district court’s TRO or preliminary injunction.” As such, the court found any claims of irreparable injury to be nothing more than conclusory or speculative.

Agreeing with the district court that the government does not “suffer by a temporary preservation of the status quo,” the court here found that this was especially true in this instance as the money that is being spent as a result of the preliminary injunction had already been appropriated by Congress.

“We do not find that federal agencies suffer significant, let alone irreparable, injury when they simply follow what has already been prescribed by the legislature,” said the court.

Likelihood of success. Next, the court looked to whether the government was likely to succeed on the merits. In issuing its preliminary injunction, the district court found that the plaintiffs’ claims were justiciable in the federal courts and that they were likely to succeed on the merits of their ultra vires claims as well as some of their APA claims. Here, the court considered each of these issues in turn.

Administrative channeling. According to the government, the Civil Service Reform Act of 1978 (CSRA) established a comprehensive system for reviewing personnel action taken against federal employees. As such, it argued that the plaintiffs’ claims must be channeled through the administrative system established by the CSRA, thus stripping the district court of subject matter jurisdiction. The court was not persuaded.

The plaintiffs’ ultra vires and APA claims “plainly fall outside the scope of the CSRA’s review provisions,” said the court. Neither the Merit Systems Protection Board (MSPB) nor the Federal Labor Relations Authority (FLRA) has the authority to address the type of statutory and constitutional claims raised by the plaintiffs, explained the court, and the plaintiffs were not challenging employment decisions with respect to individual employees.

In addition, the court observed that nearly every case cited by the government to support its position involved at least one claim that fell properly within the unquestioned jurisdiction of the MSPB or the FLRA. No such claim was present here. As such, the district court had correctly determined that the plaintiffs’ claims were properly raised before that court.

Ultra vires. Turning to the plaintiffs’ ultra vires claims, the court found the government was unlikely to win on the underlying merits of these claims.

“Neither the Constitution nor any federal statute grants the President the authority to direct the kind of large-scale reorganization of the federal government at issue,” said the court. Although the President has significant removal power with respect to the appointed officers of federal agencies, that power is not without its limits, and a President has never exercised such control over inferior officers, much less over thousands of rank-and-file employees, the court explained.

As to the actions taken by OMB, OPM, and DOGE, the government conceded that OMB and OPM have only supervisory authority over other federal agencies. DOGE, noted the court, has no statutory authority whatsoever. Accordingly, the appellate court agreed with the district court that these organizations’ actions directing other federal agencies to engage in restructuring and large-scale RIFs were ultra vires.

APA claims. With regard to the plaintiffs’ APA claims, the government argued that no final agency action was undertaken and thus these claims were unreviewable. The court disagreed.

The court noted that neither it nor the district court have received a declaration or been shown any documentation suggesting that the approvals of the ARRPs did not represent OMB/OPM’s “definitive position” on the matter. Absent such evidence, the court found unpersuasive the government’s assertions to the contrary.

Given its conclusion that OMB/OPM’s actions were final and subject to judicial review, the court explained that it straightforwardly followed that the actions were in violation of the APA. Thus, the government failed to show a likelihood of success on the merits as to these claims.

Equitable stay factors. Finally, the court stated it would have little trouble affirming the district court’s conclusion that the plaintiffs would suffer irreparable injury absent an injunction. The economic harm to laid-off employees was obvious, said the court, and the downstream impact of such large-scale RIFs could lead to the proliferation of food-borne disease and hazardous environmental conditions, among other issues. Accordingly, the court denied the government’s emergency motion for a stay pending appeal.

Dissent. In a dissent, Judge Callahan argued that the plaintiffs’ claims were not justiciable, and that any appeals should have been first brought before the MSPB or the FLRA. Even if the claims were justiciable, Judge Callahan asserted that the government was likely to prevail, noting that the Constitution vests the President with authority over the Executive Branch and that agencies have the statutory authority to terminate employees, and as such the executive order was far from ultra vires.

The case is No. 25-3293.

Judge: Fletcher, W.

Attorneys: Alice Xiaohe Wang (Altshuler Berzon) for American Federation of Government Employees, AFL-CIO. Tony LoPresti, Santa Clara Office of the County Counsel, for County of Santa Clara. Sharanya Mohan (Public Rights Project) for City of Chicago. Maxwell A. Baldi, U.S. Department of Justice, for Donald J. Trump.

Companies: American Federation of Government Employees, AFL-CIO; City of Chicago

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