Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—N. D. Cal.: OPM ordered to rescind efforts to terminate probationary employees of federal agencies, (Mar 3, 2025)

By Ronald Miller, J.D.

No statute has granted OPM the authority to direct the termination of employees in other agencies.

A federal district court in California ruled that the Office of Personnel Management’s (OPM) efforts to terminate probationary employees of various federal agencies were illegal, invalid and must be rescinded. Although the court lacked jurisdiction to hear the claims of unions representing federal employees, it determined that organizations that sought to protect federal lands or veterans had a legally protected interest whose impairment constituted an actual, particularized harm sufficient to create an injury in fact for purposes of standing. The court rejected the OPM’s assertion that the plaintiffs failed on causation. Rather, the court concluded that OPM exceeded the bounds of its authority by unlawfully directing the mass termination of probationary employees across a wide range of federal agencies (American Federation of Government Employees, AFL-CIO v. United States Office of Personnel Management, C 25-01780 WHA (N.D. Cal. Feb. 28, 2025)).

Probationary employees. On January 20, 2025, the acting director of the Office of Personnel Management (OPM) issued a memo to department and agency heads directing them to identify all employees serving probationary periods by January 24, and to “promptly determine whether those employees should be retained at the agency.”

On February 13, OPM communicated with the heads of several federal agencies in a private conference call. The next day, OPM sent an email to federal agencies’ chief human capital officers requiring them to finalize their lists of probationary employees they wish to keep and wish to terminate, and to begin taking action. A large-scale termination of probationary employees from a myriad of federal agencies followed.

According to the employees, OPM ordered agencies to use template notices—supplied by OPM—to implement the ordered terminations, and those templates falsely premised the en masseterminations on individual performance. OPM and the federal agencies involved have not disclosed the number or identity of those terminated (even to their unions).

Injunctive relief. The plaintiffs who filed this action fall into two groups: (1) the union plaintiffs; and (2) various organizations. On February 19, 2025, they filed a complaint for declaratory and injunctive relief. Four days later, on February 23, they filed an amended complaint and moved for a temporary restraining order.

The plaintiffs argued that OPM directed federal agencies to fire probationary employees, and that the action was an ultra vires act because it exceeded the scope of OPM’s statutory authority, intruded upon the statutory authority of the individual federal agencies and their heads, violated the Civil Service Reform Act’s (CSRA) provisions governing agency terminations based on performance and reductions in force (RIFs), and violated the General Authority to Employ enacted by Congress. Further, they argued that the OPM directive to terminate probationary employees constituted a final agency action that violated the APA because it exceeded the agency’s statutory or constitutional authority, was otherwise unlawful, was arbitrary and capricious, and did not undergo the necessary notice and comment process.

Presently, the plaintiffs’ motion for a TRO seeks an order enjoining the OPM and federal agencies from taking any actions to effectuate OPM’s probationary employee termination directive.

Ultra Vires claim. As an initial matter, the plaintiffs argued that OPM’s termination directive constituted an ultra vires act that violated and continues to violate the scope of its and all impacted agencies’ statutory authority as established by Congress.

Here, the court determined that the plaintiffs are likely to succeed on their ultra vires claim. No statute has granted OPM the authority to direct the termination of employees in other agencies. “Administrative agencies [like OPM] are creatures of statute. They accordingly possess only the authority that Congress has provided.” Congress’s statutory scheme grants to each agency head the authority to manage their own affairs, including the hiring and firing of employees.

With respect to the OPM, Congress has vested its director with the authority to “secur[e] accuracy, uniformity, and justice in the functions of the Office,” “appoint[] individuals to be employed by the Office,” and “direct[] and supervis[e] employees of the Office.” OPM does not have the authority to direct the firing of employees, probationary or otherwise, in any other federal agency.

The court concluded that the weight of the evidence supported the plaintiffs’ contention that OPM exceeded the bounds of its authority by unlawfully directing the mass termination of probationary employees across a wide range of federal agencies. The court rejected OPM’s contention that its actions constituted mere “guidance.”

APA claims. Further, the court determined that the plaintiffs had also shown that their APA claims were likely to succeed. Under the APA, only “final agency action[s]”—those that “mark the consummation of the agency’s decision making process” and determine “rights or obligations... from which legal consequences will flow” are subject to judicial review. OPM’s direction to the other agencies constituted a final agency action for the purposes of the APA.

Numerous agencies stated that they were acting at the direction of the OPM. However, OPM’s direction to other agencies was not supported by any statutory authority. The plaintiffs were therefore likely to show that OPM’s directive constituted an agency action that was “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right” that must be “[held] unlawful and set aside.”

The plaintiffs are also likely to show that the OPM directive was an arbitrary and capricious action. The key fact here was that the template letters sent from OPM to the directed agencies stated: “[T]he Agency finds, based on your performance, that you have not demonstrated that your further employment at the Agency would be in the public interest.” It was unlikely that the agencies themselves had the time to conduct actual performance reviews of the thousands terminated in such a short span of time, observed the court. It is even less plausible that OPM alone managed to do so.

Lastly, the plaintiffs are likely to show that OPM failed to comply with notice and comment rulemaking. Rules are subject to the notice and comment process prior to enactment. OPM’s January 20 memo and February 14 email are likely to constitute a “rule” under the APA.

Jurisdiction. Based on rulings in other actions brought by unions representing federal employees, the court concluded that it lacked subject matter jurisdiction to hear the unions’ claims. Congress has set forth statutory schemes by way of the Federal Service Labor- Management Relations Statute (FSLMRS) and the CSRA to forestall judicial review.

However, the court rejected OPM’s argument that the CSRA and FSLMRS intended to channel all disputes that touch on a federal employment relationship to administrative review, no matter the party bringing such a dispute.Thus, it was likely that the court had jurisdiction to hear the claims of the organizational plaintiffs.

Standing. Where a plaintiff seeks prospective injunctive relief, he “must demonstrate that he has suffered or is threatened with a concrete and particularized legal harm, coupled with a sufficient likelihood that he will again be wronged in a similar way.” “An organization has standing to bring suit on behalf of its members [“representational standing”] if ‘(1) at least one of its members would have standing to sue in his own right, (2) the interests the suit seeks to vindicate are germane to the organization’s purpose, and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.’”

An organization has direct organizational standing, meanwhile, “where it establishes that the defendant’s behavior has frustrated its mission and caused it to divert resources in response to that frustration of purpose.”

National Parks. In this instance, the Coalition to Protect America’s National Parks and Main Street Alliance, organizations that sought to protect the recreational or aesthetic enjoyment of federal lands is a legally protected interest whose impairment constitutes an actual, particularized harm sufficient to create an injury in fact for purposes of standing. The National Park Service has terminated close to 1,000 newly hired employees. Its members continued use and enjoyment of the national parks will likely be, and in at least one case already has been, injured by the terminations that have taken place at the National Parks Service. Similarly with respect to the Main Street Alliance.

Other organizations, such as the Western Watershed Project, Vote Vets Action Fund, and Common Defense Civic Engagement, likewise had standing where their membership sought to vindicate protected interests in recreational enjoyment, and constituted grassroot advocates for veterans, military families, and civilian supporters.

Because OPM directed mass firings and the plaintiff organizations each likely will be (or have been) injured as a result, they have each established a sufficient causal link between the mass termination of employees at the implicated agencies, and the imminent, foreseeable, and in some cases actual injuries that they face.

Thus, access to essential government services is also likely, and in some cases actual, irreparable harm. Finally, plaintiffs face irreparable harm because they have diverted significant or even all present resources to responding to the hardships created by the mass termination of probationary employees.

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.

Cases: PublicEmployees Procedure Labor UnionsMembers Discharge CaliforniaNews GCNNews