Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—W.D. Tex.: District court dismisses federal agencies’ action for permission to terminate labor contracts, (Jul 25, 2025)

By Jason Albright, J.D.

“Plaintiffs’ suit, however well-intentioned, is an unprecedented invitation for an advisory opinion….”

The Department of Defense and seven other federal agencies lack standing to seek a declaratory judgment that they are authorized to terminate their labor contracts with the American Federation of Government Employees (AFGE) pursuant to President Trump’s Executive Order 14,251, which asserts that the Federal Service Labor-Management Relations Statute cannot be applied to the agencies “in a manner consistent with national security requirements and considerations,” a federal district judge in Texas held. The judge, appointed by Trump in 2018, found that the agencies’ articulated injuries are not redressable injuries-in-fact sufficient to confer standing, and that the agencies seek an impermissible advisory opinion by requesting the court’s “preemptive approval of Plaintiffs’ desired future conduct” (United States Department of Defense v. American Federation of Government Employees, District 10, No. 6:25-cv-00119-ADA (W.D. Tex. July 23, 2025)).

The eight federal agencies brought their suit in the U.S. District Court for the Western District of Texas, and the case was before Judge Alan D. Albright, who was appointed by President Trump during his first term in 2018.

FSLMRS. “In the 1970s,” recounted Judge Albright, “Congress enacted the Federal Service Labor-Management Relations Statute (FSLMRS). 5 U.S.C. § 7101 et seq. The FSLMRS ‘provides certain protections, including union representation, to a variety of federal employees,’” but it exempts several agencies from coverage, such as the FBI, and it authorizes the President to exclude agencies under certain circumstances. Specifically, the FSLMRS provides that the President may issue an order excluding any agency from coverage “if the President determines that—(A) the agency or subdivision has as a primary function intelligence, counterintelligence, investigative, or national security work, and (B) the provisions of this chapter cannot be applied to that agency or subdivision in a manner consistent with national security requirements and considerations.” Id. § 7103(b)(1).

EO 14,251. On March 27, 2025, Trump issued Executive Order (EO) 14,251, invoking this authority. The EO determined that numerous agencies and agency subdivisions “have as a primary function intelligence, counterintelligence, investigative, or national security work” and that the FSLMRS cannot be applied to them “in a manner consistent with national security requirements and considerations.” Among such agencies listed in the EO are the Department of State, the Department of Veterans Affairs, and the Environmental Protection Agency.

OPM guidance. The same day Trump issued the EO, the Office of Personnel Management (OPM) provided guidance to the agencies listed in it. OPM stated that the covered agencies “are no longer required to collectively bargain with Federal unions.” It explained that the relevant unions had lost their status as the exclusively recognized labor organizations for employees of the covered agencies, and it instructed the agencies to “consult with their General Counsels as to how to implement the President’s directive.”

Agencies’ lawsuit. Also the same day, the plaintiffs, eight federal agencies—all but one of which were excluded from coverage under the FSLMRS by the EO—filed suit in Texas federal district court against AFGE District 10 and 36 local unions and councils affiliated with AFGE that represent federal employees throughout Texas.

The agencies alleged that they previously executed labor contracts with AFGE that remain in effect and that the contracts prevent them “from adopting personnel policies that align with the President’s priorities and interfere with the President’s direction of agencies engaged in sensitive operations implicating the Nation’s security, intelligence, counterintelligence, or investigative functions.” By way of example, the labor contracts allegedly require the agencies to “provide prolonged performance improvement periods for underperforming employees before proposing termination or removal.”

To ensure “legal certainty and avoid unnecessary labor strife,” the agencies asked the district court to issue a declaratory judgment confirming that they are legally entitled to rescind the contracts. In particular, they sought a declaration that they “are authorized to terminate their CBAs pursuant to the Executive Order and OPM’s implementing guidance.”

Parallel California district court action. Shortly after the agencies filed suit, the court noted, AFGE and other unions sued the President, OPM, and several federal agencies in the Northern District of California, alleging that the EO retaliates against their protected First Amendment activity, and seeking declaratory and injunctive relief. The district court in that case enjoined the EO, but the Ninth Circuit stayed the injunction pending appeal, and that litigation remains ongoing.

AFGE’s motion to dismiss. AFGE moved to dismiss the agencies complaint for three reasons. First, it argued that the government lacks standing to seek declaratory relief against them. Second, it argued that the Texas federal district court is not a permissible venue for the government’s claims. Third and finally, it argued that the federal district court should exercise its discretion to dismiss the government’s declaratory judgment action.

The court dismissed the case on the first basis.

A novel approach... “To say that the approach of filing a declaratory judgment action in the manner employed by the Plaintiffs is novel,” Judge Albright began, “is an understatement.” “Neither side to this lawsuit has identified a single instance where a federal court has exercised jurisdiction over a case in which the Executive Branch sought a pre-enforcement declaratory judgment approving of its course of conduct, much less an instance where a court granted the relief sought.”

Non-justiciable. The court concluded that the federal agencies claims are non-justiciable for two related reasons. First, the agencies’ articulated injuries are not redressable injuries-in-fact sufficient to establish standing. And second, the agencies “seek an impermissible advisory opinion by requesting this Court’s preemptive approval of Plaintiffs’ desired future conduct.”

In the shadow of CASA. Judge Albright also noted that the court’s decision to dismiss this case for lack of jurisdiction is “bolstered” by the U.S. Supreme Court’s recent decision in Trump v. CASA, in which the Court held that universal injunctions likely exceed the equitable authority that Congress has granted to federal courts. Though CASA was not decided upon the issue of standing before the district court here, Albright noted that “the practical impact of the holding in CASA as well as the core legal principle espoused by the Supreme Court remains central to this Court’s decision today—‘federal courts do not exercise general oversight of the Executive Branch; they resolve cases and controversies consistent with the authority Congress has given them,’” and “[a]bsent a justiciable case or controversy, this Court will not exercise general oversight of the Executive Branch.”

Injury-in-fact. First, the court found that the agencies lacked standing at the time the suit was filed. An injury-in-fact, it observed, occurs when the plaintiff suffers “an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical,” and because an injury must be imminent, “allegations of possible future injury are not sufficient.” The Declaratory Judgment Act, in turn, authorizes federal courts to declare the rights of parties seeking a declaration, provided the case presents an “actual controversy,” and an actual controversy exits when “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” The controversy, the court noted, must exist “at the time the complaint was filed—post filing conduct is not relevant.”

Here, the court noted, the “Plaintiffs filed this lawsuit before the White House even publicly announced the Executive Order.” “It is difficult to imagine how the parties could have formed a concrete dispute over the Executive Order when that document had not yet been released to the public.” Nor had the agencies alleged that they “received any pushback from Defendants regarding the Executive Order prior to filing their complaint.”

The agencies argued that “Defendants assuredly will not agree that the CBAs can be lawfully rescinded or repudiated,” but this, observed the court, “is nothing more than speculation about what would happen after the Executive Order came out.” “Plaintiffs have not plausibly shown that they were operating under any real threat of action by Defendants.”

Constitutional ban on advisory opinions. Finally, the court noted that, “At bottom, Plaintiffs’ Complaint seeks an advisory opinion,” and “Federal courts have uniformly declined to issue advisory opinions for more than two centuries.” Specifically, the Texas federal district court cited the U.S. Supreme Court’s 1793 refusal to issue an advisory opinion sought by President Washington. Though “sympathetic to Plaintiffs’ desire for legal certainty and the avoidance of future labor strife,” the court concluded that “it is beyond the power of an Article III judge to provide preemptive legal certainty to the acts of the Executive or Congress.”

“[F]lip-side” of “same coin.” In his closing remarks, Judge Albright noted that “the relief Plaintiffs now seek is roughly the flip-side of the same coin as the relief sought by litigants seeking nationwide injunctions against this Administration.” “One litigant,” he said, “rushes off to select a forum it perceives to be favorable to enjoin an Executive Order; and the Administration now rushes to preempt that injunction with a declaratory judgment in its own forum of choice.”

“While the Court understands the reasoning behind the Administration’s response to what it perceives as improper judicial overreach,” Albright continued, “the solution to perceived judicial overreach is not more judicial overreach, but a return to the principles of judicial restraint and strict adherence to the constitutional limits imposed upon the federal judiciary.”

The case is No. 6:25-cv-00119-ADA.

Judge: Albright, A.

Attorneys: Lisa Zeidner Marcus, U.S. Department of Justice, for the U.S. Department of Defense. John M. Pellettieri (Bredhoff & Kaiser) for American Federation of Government Employees, AFL-CIO, District 10.

Companies: American Federation of Government Employees, AFL-CIO, District 10

Cases: PublicEmployees Labor Bargaining ContractClaims RemediesDamages FedTracker LaborEmployment AgencyNews