Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—N.D. Cal.: Federal court has jurisdiction to hear claims brought by public-sector unions concerning federal employee terminations, (Mar 26, 2025)

By Nicholas Kaster, J.D.

The court held that the three factors set out by the Supreme Court in Thunder Bay permitted the public-sector unions to go forward in district court.

A federal district court in California, reconsidering a prior decision, has held that it has subject matter jurisdiction over claims brought by public-sector unions concerning federal employee terminations and that such claims did not have to be channeled through the Merit Systems Protection Board and/or the Federal Labor Relations Authority (American Federation of Government Employees, AFL-CIO v. United States Office of Personnel Management, No. C 25-01780 WHA (N.D. Cal. Mar. 24, 2025)).

Background. The Civil Service Reform Act of 1978 (CSRA) established a comprehensive system for reviewing personnel action against federal employees and practices related to collective bargaining. That system features review by the Merit Systems Protection Board (MSPB) of certain employee terminations and review by the Federal Labor Relations Authority (FLRA) of certain unfair labor practices. This scheme impliedly excludes district courts from reviewing the same kinds of claims.

In this case, public-sector unions claimed—along with other plaintiffs—that the Office of Personnel Management (OPM) acted ultra vires when it directed agencies to terminate tens of thousands of probationary employees en masse using “performance” as a pretext. The claimants also brought three Administrative Procedure Act claims against the OPM, contending that the OPM’s directive was in excess of its authority, “arbitrary” as to real employee performance or agency need, and procedurally busted. As relief, they sought a declaration and a rescission of the directives, ensuring parties—and employees—remain in the positions they held but for the unlawful directives.

Thunder Basin factors. 28 U.S.C. Sec. 1331 provides that the district courts “shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Congress nonetheless may countermand jurisdiction by enacting other schemes for specific claims—usually review by an agency and then by an appeals court. The result is that a district court shall hear a challenge to an agency action unless (1) Congress provided a statutory review scheme limiting Section 1331 and (2) the claims brought are of the type Congress intended to be reviewed within it.

In Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994), the U.S. Supreme Court provided three factors for deciding whether these claims are of the type that should be channeled through the CSRA. Claims are not channeled into the CSRA’s scheme if they are: (1) outside the agency’s expertise; (2) if the suit is “wholly collateral to [the] statute’s review provisions”; and (3) if “a finding of preclusion could foreclose all meaningful judicial review.” The court considered each of these factors.

Outside the agency’s expertise. The public-sector unions’ claims here raised only a “standard” issue of administrative and constitutional law, relating not at all to considerations of agency policy, the court noted. The ultra vires claim asked whether the OPM had any authority to direct another agency to terminate its employees, and whether by purporting to speak such power into existence the executive violated the constitution’s separation of executive and legislative functions. The MSPB and FLRA know a good deal about employment and labor policy, but nothing special about the separation of powers. For that reason, agency adjudications are generally ill-suited to address structural constitutional challenges like those here. Nor are the public-sector unions’ ultra vires and APA claims intertwined with factual and policy questions that would benefit from the MSPB’s or the FLRA’s expertise, said the court. This is not a case where a threshold question requires their expertise. Nor is it one where the core questions are wrapped up in the employer-agency policy choices that the MSPB or the FLRA commonly parse.

Collateral to the statute’s review provisions. The public-sector unions’ claims are also collateral to the types of claims brought before the MSPB or the FLRA, the court opined. The public-sector unions’ ultra vires or separation-of-powers claim was not about each employer agency’s purported decision to terminate any or all of its employees. Instead, it was about a prior controlling event: Did the OPM exceed its authority when it directed all federal agencies to terminate their probationers en masse? This distinguished these claims from others that have attacked, substantively or procedurally, one agency’s decision about one employee or its own workforce, which are the kinds of claims appellate courts have channeled into the CSRA. The claims here are instead like others challenging the executive’s power to impose government-wide personnel policy, not “any [one] personnel action,” claims which have remained in district court.

Precluded from all meaningful judicial review. The court explained that the public-sector unions’ ultra vires and other claims will not be subject to judicial review if not litigated here. The ultra vires claim is not one that can be brought directly in the MSPB or the FLRA, said the court. Worse, there is not even some other claim that could be brought reliably through the MSPB or the FLRA such that this one might be resurrected by a court of appeals.

Under the MSPB’s statutory scheme, there is arguably no way to bring a direct challenge to a mass removal. But this issue matters none for probationary employees. “An employee” cannot contest even “a removal” if she is probationary.

Employees covered by collective bargaining agreements can elect to challenge agency actions under the statutory scheme or under their agreement’s scheme (arbitration). But no party here argued that any agreement provided an avenue for arbitrating the issues in this case.

The other collective-bargaining related pathways are also unavailing, said the court. They focus on preserving the opportunity for workers to bargain as such, which again no party contended was implicated here.

For similar reasons, asking the FLRA’s General Counsel to investigate the OPM’s directive as an unfair labor practice is unavailing. Even were the General Counsel to investigate the termination, said the court, there is no assurance it would submit a complaint to the FLRA. The General Counsel must issue a “written statement” explaining its decision, but the statutory scheme does not provide for judicial review of the statement—only for review of “any final order of the [FLRA],” Once again, the court said, that separation means the public-sector unions, absent district court jurisdiction, might never have judicial recourse.

In sum, said the court, but for district court jurisdiction, the public-sector unions will be precluded from judicial recourse and relief even for their separation-of-powers claim. Because “Congress rarely allows claims about agency action to escape effective judicial review,” particularly constitutional claims, this final Thunder Basin factor favors permitting them to go forward in district court.

Conflict with three earlier decisions. Early on, the court followed three recent decisions in other district courts holding that claims brought by public-sector unions concerning federal employee terminations had to be channeled through the Merit Systems Protection Board and/or the Federal Labor Relations Authority and therefore the district court had no subject-matter jurisdiction over those claims. After further briefing, however, this order held that the district court does have subject-matter jurisdiction over these claims by public-sector unions and that its earlier ruling to the contrary was mistaken.

This court explained why this decision came out differently than the prior decisions.

In Am. Foreign Serv. Ass’n v. Trump (No. 25-cv-352 (CJN), 2025 WL 573762 (D.D.C. Feb. 21, 2025)), the plaintiff unions represented employees of the United States Agency for International Development. But those employees were subject to the Foreign Service Act of 1980, not the CSRA. Because the employees could seek relief through the FSA’s review scheme (including for constitutional claims on appeal), there was no basis for their unions to do so in district court.

In AFGE v. Ezell (No. Civ. No. 25-10276-GAO, 2025 WL 470459 (D. Mass. Feb. 12, 2025)), the plaintiff unions represented employees across the federal government who received a “Fork in the Road” email purporting to offer deferred resignation—to stop work now, resign later, and get paid between. After concluding the unions in any case lacked standing, the district court applied all three Thunder Basin factors in one paragraph, asserting that the unions’ aggrieved members—who were not exclusively probationary—could bring claims through the CSRA’s processes. Not so here, said the court.

Finally, in Nat’l Treasury Emps. Union v. Trump (No. 25-cv-420 (CRC), 2025 WL 561080 (D.D.C. Feb. 20, 2025)), the plaintiff unions represented federal employees who faced termination because of an executive order that directed “mass firings through RIFs” in ways violating requirements for RIFs. In its order applying Thunder Basin, the district court emphasized the FLRA’s and MSPB’s experience in labor relations and complex reduction-in-force provisions. Because some claims could go forward through one or both schemes (the order did not specify which claims or where), and because constitutional claims could be asserted on appeal, channeling the claims into CSRA review did not foreclose judicial recourse. This was not the case here, the court said. Here, the case does not turn on the intricacies of RIFs, nor take on non-probationers’ terminations. The alleged wrongs—of sweeping separations-of-powers violations and generic APA rulemaking violations—will go without judicial recourse if not brought in district court, the court explained.

The case is No. C 25-01780 WHA.

Judge: Alsup, W.

Attorneys: Danielle Evelyn Leonard (Altshuler Berzon) for American Federation of Government Employees, AFL-CIO. James D. Todd, Jr., U.S. Department of Justice, for U.S. Office of Personnel Management.

Companies: American Federation of Government Employees, AFL-CIO; U.S. Office of Personnel Management

Cases: PublicEmployees Procedure IndividualRights Discharge Layoffs DOGE FedTracker CaliforniaNews