Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—9th Cir.: Government denied emergency stay of order requiring reinstatement offers for fired probationary employees, (Mar 18, 2025)

By Kathleen Kapusta, J.D.

An “administrative stay of the district court’s order would... disrupt the status quo and turn it on its head.”

Denying the government’s motion for an emergency stay of the preliminary injunction issued by Judge Alsup that ordered the reinstatement of probationary employees at several agencies, the Ninth Circuit, in an unpublished order, explained that an administrative stay of the district court’s order, rather than preserving the status quo, “would disrupt the status quo and turn it on its head.” Judge Bade, dissenting, argued that granting the stay would allow the court to rule on the motion for a stay pending appeal “without potentially subjecting the government and the terminated employees to whiplash caused by diverging downstream decisions” (American Federation of Government Employees v. U.S. Office of Personnel Management, No. 25-1677 (9th Cir. Mar. 17, 2025, unpublished order)).

Lower court proceedings. Ruling from the bench on March 13, 2025, Judge William Alsup of the U.S. District Court for the Northern District of California, in a case brought by the American Federation of Government Employees and other unions, ordered the Trump administration to offer reinstatement to thousands of probationary employees who were terminated in recent reductions in force at numerous federal agencies. Judge Alsup had previously issued a temporary restraining order in the case in February.

Template termination letter. In his follow-up written order, issued on March 14, Judge Alsup noted evidence that OPM had not only directed other agencies to fire their probationary employees, but also it directed the agencies to fire the employees under the pretense of “performance.” Indeed, there was evidence that OPM disseminated a template termination letter to the agencies with text stating “The Agency finds, based on your performance, that you have not demonstrated that your further employment at the Agency would be in the public interest. For this reason, the Agency informs you that the Agency is removing you from your position of [TITLE] with the Agency and the federal civil service effective [insert date and time, if necessary.]”

Ultra vires act. Finding that the OPM’s directive to fire the probationary employees was an ultra vires act that violated its and the impacted agencies’ statutory authority, the judge declared that “No statute—anywhere, ever—has granted OPM the authority to direct the termination of employees in other agencies.” Rather, he explained, Congress granted to each agency head the authority to manage its own affairs, including the hiring and firing of employees. “OPM,” however, “did not have the authority to direct the firing of employees, probationary or otherwise, in any other federal agency,” Alsup wrote.

As to the government’s assertion that OPM did not issue a directive, but instead asked the agencies to select non-mission-critical probationary employees for termination, Alsup found unpersuasive the “sanitized record provided in support—press releases and a feeble start to a yet-to-come ‘administrative record.’” Further, he explained, the “OPM template letter used to effectuate those terminations—‘[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’—was an obvious pretext intended to obstruct appeal and avoid statutory and regulatory reduction-in-force procedures (for example, the honoring of veteran preferences in the order of retention).”

Stay denial. In his March 13 minute order, Alsup ordered the employees’ immediate reinstatement. The Trump administration appealed the order to the Ninth Circuit the same day and moved for an emergency stay, which the court denied in a short two-paragraph order. The government also moved for a stay pending appeal.

Bade dissent. Judge Bade, dissenting from the court’s denial of the emergency stay, noted that in considering the request for an administrative stay, the “touchstone is the need to preserve the status quo.” Further, she observed, pursuant to Ninth Circuit precedent, “status quo is anchored to the time immediately preceding the issuance of the preliminary injunction.”

Pointing out that the agencies identified in the lower court’s preliminary injunction completed the challenged terminations, Judge Bade argued that the preliminary injunction will change that status quo by requiring the agencies to immediately offer reinstatement to the probationary employees. A limited administrative stay, on the other hand, would briefly pause that change while the court decides the merits of the motion for stay pending appeal.

Administrative burden. Judge Bade also found persuasive the government’s assertion that the preliminary injunction order imposes a substantial administrative burden by requiring the affected agencies to offer reinstatement to thousands of terminated employees, “who may accept and require onboarding, credentialing, and other human resources or administrative action,” and to submit a list of all probationary employees who were terminated on February 13 and 14 along with “an explanation” of what has been done to comply with the court’s order by March 20.

This, she continued, would cause “further confusion and uncertainty” if the court were to later grant the motion for a stay pending appeal. “In sum,” she asserted, “a limited administrative stay is necessary to preserve the status quo as it existed prior to the district court’s preliminary injunction.”

The case is No. 25-1677.

Judge: Per curiam.

Attorneys: Danielle Leonard (Altshuler Berzon) for American Federation of Government Employees, AFL-CIO. Kelsey John Helland, Office of the U.S. Attorney, for U.S. Office of Personnel Management. Kelsey John Helland, Office of the U.S. Attorney, for Charles Ezell.

Companies: American Federation of Government Employees, AFL-CIO

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