Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—4th Cir.: Musk, DOGE awarded stay of preliminary injunction barring them from dismantling USAID, (Mar 31, 2025)

By Kathleen Kapusta, J.D.

“Musk is unique: never before in our Republic have we seen a non-appointed individual wield such immense power and control over government operations.”

In a brief unpublished order, the Fourth Circuit granted Elon Musk, the U.S. Doge Service, and the Department of Government Efficiency an emergency motion for stay pending appeal of the preliminary injunction entered by the district court in an action brought by current and former employees or contractors of USAID who alleged the defendants unlawfully cancelled government contracts, placed USAID personnel on administrative leave, reduced the force of USAID employees and contractors, closed the USAID headquarters, and took down the USAID website. Writing for the court, Judge Quattlebaum, with whom Judge Neimeyer, concurred, explained the defendants made a strong showing that they are likely to succeed on the merits of the appeal, that they will be irreparably injured absent the stay, that the plaintiffs will not be injured because of the stay, and that the stay favors the public interest. Judge Gregory concurred in the result only, explaining that the plaintiffs failed to include the proper defendants (Does 1-26 v. Musk, No. 25-1273 (4th Cir. Mar. 28, 2025, unpublished)).

Judge Quattlebaum argued that the defendants made a strong showing the district court erred in finding the plaintiffs were likely to succeed on the merits of their Appointments Clause and separation of powers claims. Noting that most of the complained-of actions were approved or ratified by Secretary of State Marco Rubio, his deputy assistant, and the leader of an internal DOGE team, the district court conceded that the terminations of contracts, the administrative leave decisions, and the reductions in force were either approved or ratified by USAID officials. Thus, these actions provided no basis for the injunction in connection with the Appointments Clause.

Dubious. While the district court granted the injunction based on the decisions to move USAID out of its previous headquarters and to take down the USAID website, and a finding that the defendants, “as well as other government officials, have acted swiftly to shut down, dismantle, and effectively eliminate USAID as an independent agency,” Quattlebaum found that conclusion dubious as the only evidence cited by the plaintiffs and relied upon by the district court were social media posts and news reports.

Senior Advisor. There simply was no record evidence, Quattlebaum asserted, that Musk both directed those decisions and did so without the approval or ratification of USAID officials; rather, he acted as a Senior Advisor to the President and not as the Administrator of DOGE and all decisions pertaining to USAID were either made or approved by authorized individuals. “The current evidence in the record indicates that Musk’s actions did not involve the exercise of authority of an office granted by law but rather the implementation of Executive policies,” Quattlebaum asserted, and thus he did not act as an officer who required constitutional appointment.

Unconventional. Further, Quattlebaum stated, while the district court identified USAID as authorizing and ratifying all actions complained of except closing the prior USAID headquarters and taking down its website, neither the Executive nor USAID was named as a defendant. “Confined to the two allegedly unlawful actions identified by the district court, there is no strong likelihood of success on the merits of a separation of powers claim against a defendant who the district court found to be acting without authority and who the government claims is not an Officer of the United States.” Though Quattlebaum acknowledged that the defendants’ role and actions related to USAID were not conventional, that did not necessarily equal unconstitutional.

Irreparable harm. In addition, Quattlebaum found the district court erroneously concluded that the plaintiffs showed irreparable harm based on subjective fear of a lack of physical security, fear of nonpayment of expenses, fear their reputations will be harmed by the negative comments of the defendants about USAID employees and contractors, and fear that their confidential information might be exposed. However, they alleged no employment law violations or breach of any contract and more significantly, they did not allege facts showing any physical manifestations or medical treatment required for almost any emotional distress claim recognizable by law. Moreover, Quattlebaum continued, “to the extent these alleged harms are cognizable damages at all, most can be remedied by money damages.”

Balance of equities. The district court, according to Quattlebaum, also erred in concluding that the balance of equities favors issuing an injunction and that the injunction furthers the public interest. Not only do the mandatory obligations of its order extend well beyond granting relief to the individual plaintiffs who brought this lawsuit and enjoining the defendants named, it failed to limit relief to the irreparable harms it found.

Further, Quattlebaum pointed out, the injunction’s mandatory obligations are inconsistent with the district court’s findings that USAID officials approved or ratified the decisions to terminate certain USAID contracts, to place certain USAID employees on administrative leave, and to terminate others as its order requires the defendants to reinstate various computer and electronic systems of USAID employees and contractors on administrative leave. “If, as the district court explained, the administrative leave and contract termination decisions were not unconstitutional, injunctive relief reinstating terminated access is inappropriate.”

Finally, addressing whether the defendants would be irreparably injured without a stay, Quattlebaum explained that the district court’s order prevents the defendants from complying with Executive branch instructions because it summarily determined that Rubio, his deputy administrator, and the internal DOGE team lead are blindly taking instructions from the defendants. Thus, the district court, based on alleged injuries from a handful of plaintiffs, issued injunctive orders that dictate and restrict a separate branch of government. “Unlike the harm alleged by plaintiffs, this harm cannot be remedied by monetary damages. It truly is irreparable.”

Accordingly, the court granted the motion to stay the preliminary injunction pending appeal.

Gregory concurrence. Concurring in the results only, Judge Gregory clarified that his concurrence “should not be seen as an endorsement of the Executive’s likely unconstitutional actions in closing USAID, effectively dissolving a ‘creature[] of statute’ that can only be created or destroyed by Congress.” Rather, he wrote, as “an Article III court, we are constrained to decide only the cases or controversies properly before us. The district court could not enjoin these unconstitutional actions because the proper defendants were not before it. However, Plaintiffs otherwise would have standing to pursue the relief they seek.”

As to the plaintiffs’ separation of powers claim, Gregory noted that the “Executive branch may not eliminate a congressionally created and funded agency without congressional authorization. By doing so here, the Defendants’ actions violated a core tenet of our Constitution.” Further, Gregory argued, not only did the Executive act without Congress’s approval, it acted in defiance of its express will as Congress has consistently voiced its support for USAID. “I believe that when the Executive branch systematically guts an agency such that it cannot carry out its congressionally designated role, it has stepped beyond the bounds of its constitutional authority. As the district court found, this is exactly what has happened here.”

Turning to the plaintiffs’ Appointments Clause claim, which Gregory characterized as “a bastion of our democratic system and serves as yet another crucial check on the limits of Executive power,” Gregory noted that Musk was not appointed as an Officer of the United States under either of the permissible methods yet the undisputed record showed he does far more than merely advise the President. “The President,” Gregory argued, “has made clear that he intends for Musk to be an ongoing, omnipresent fixture in American government. But under our Appointments Clause, it is up to Congress to determine which employees will maintain this extensive and extending control.”

Though he believed the district court properly held that the plaintiffs established a likelihood of success on the merits as to the unconstitutionality of the defendants’ actions in dismantling USAID, he agreed with the majority that if Musk and DOGE lack the authority to order USAID officials to do anything, “enjoining Musk to direct USAID officials to restore employment, building access, and security services, among other relief, also cannot stand.” The plaintiffs, he concluded, simply did not name the defendants with the proper authority to effectuate the relief they seek.

The case is No. 25-1273.

Judge: Per curiam.

Attorneys: Pooja Chaudhuri (State Democracy Defenders Fund) for J. Does. Cynthia Anne Barmore, U. S. Department of Justice, for Elon Musk.

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