Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—D. Md.: States challenging layoffs of probationary federal employees granted preliminary injunctive relief, (Apr 2, 2025)

By Kathleen Kapusta, J.D.

“The government can terminate probationary employees en masse (i.e., dismiss them via a reduction in force, or ‘RIF’), but when it does so it must follow certain laws and regulations.”

Noting that the recent actions of the defendant government agencies—including the Department of Agriculture, OPM, and Defense—in laying off their probationary civilian employees “probably broke the laws that regulate en mass terminations of government employees,” a federal court in Maryland issued a preliminary injunction to restore the status quo pending appeal of this case. Despite having previously issued a nationwide TRO, the court limited the scope of the injunction to those federal probationary workers whose sudden layoffs have harmed, are harming, or will continue to harm the plaintiff states if not immediately stopped (State of Maryland v. U.S. Department of Agriculture, No. JKB-25-0748 (D. Md. Apr. 1, 2025)).

The plaintiffs, 19 states and the District of Columbia, sued 41 defendants, including cabinet agencies and their secretaries as well as other federal agencies and their heads. They alleged that the government’s termination of probationary federal employees was contrary to law and arbitrary and capricious under the Administrative Procedure Act. They argued that in response to directives from OPM and executive orders issued by President Trump, the government terminated at least 24,000 probationary employees without providing them any advance notice as required by regulations governing reductions in force.

Harms. These employees, the states contend, began turning to the states for unemployment benefits and other social services, which caused the states to incur significant costs from processing and investigating the unemployment applications and diverting resources from other state programs along with the loss of revenue from taxes on the employees’ wages.

TRO. On March 13, the court issued a nationwide TRO staying all purported terminations of the affected probationary employees and enjoining the restrained defendants from conducting any future RIFs except in compliance with the relevant notice requirements and other applicable laws and regulations. The states then moved for a preliminary injunction.

As an initial matter, the court noted it previously held that some subset of the states had standing to seek the TRO, that the dismissals without notice to the states were reviewable final agency actions, and that, under the Thunder Basin doctrine, district court jurisdiction over the states was not foreclosed by Congress’s choice to channel certain related claims into an administrative review scheme. Here, it found no reason to depart from those conclusions. Unlike its TRO decision, however, the court found that all plaintiff states, not just Maryland, have alleged facts sufficient to infer standing to pursue preliminary injunctive relief, which was enough at this stage.

Injury. As to injury, the court noted that the states’ asserted an informational harm in which they alleged they did not receive information to which they were legally entitled, specifically notice of the RIFs that required them to deal with a sudden surge in unemployment. Harms demonstrated by the states include, among other things, the loss of money, time, and other resources spent on fast-tracking and rapid-response efforts and preparing unemployment assistance programs to handle an influx of claims. The court thus “continued to stand by its earlier conclusion that each state has, to the degree of evidence required at the preliminary injunction stage, shown its informational injury to be a constitutionally cognizable injury in fact.”

Further, the court found the asserted harms concrete enough to constitute cognizable information injuries. Under the relevant statutes and regulations, the states were legally entitled to notice of an imminent RIF and the states satisfactorily alleged a variety of consequential harms flowing from the defendants’ failure to provide notice. Noting that the government has described the states’ harms as “aris[ing] from the... regulation (or lack of regulation) of someone else,” the court explained that “this is not a lawsuit about the legality of the Government’s actions from the viewpoint of probationary employees. Rather, it is a suit about the legality of the Government’s actions from the viewpoint of the Plaintiff States, with all—and only—the unique injuries that viewpoint entails.” Those injuries, said the court, are redressable by the relief they seek.

After reviewing the other elements of standing, the court again found the states have demonstrated with the degree of proof appropriate for the preliminary injunction stage that they have standing to pursue this relief.

Likelihood of success on the merits. Having determined that nothing changed its prior conclusion that it has jurisdiction to hear this case, the court turned to the factors necessary for issuance of a preliminary injunction, starting with the likelihood of success on the merits. Here, it found the states continue to show they are very likely to succeed on the merits of their APA contrary-to-law claim. And as in its TRO order, it again held that the states are within the zone of interests of the RIF statute.

Termination of probationary employees. In opposing the preliminary injunction, the government took issue with the court’s previous conclusion that there are only three circumstances under which probationary employees may be terminated: individually terminated for specified work performance reasons, individually terminated for reasons based on conditions arising before their appointment, or as part of a RIF. Though the government did not earlier identify any additional methods by which a probationary employee could be terminated, it argued here that these three methods are not exhaustive, pointing to OPM regulations in support. Disagreeing, the court reasoned that the “Government is correct that these regulations do not expressly state that they are exclusive, but where the relevant regulations provide for three very specific ways of terminating probationary employees, it makes little sense to read in a separate, general, and unlimited method of termination, which would simply subsume and render superfluous the enumerated methods.”

Nor was the court persuaded by the government’s reliance on 5 C.F.R. § 315.803(a), which provides that “[t]he agency shall utilize the probationary period as fully as possible to determine the fitness of the employee and shall terminate his or her services during this period if the employee fails to demonstrate fully his or her qualifications for continued employment.” The next section, the court observed, explains how an agency can terminate a probationary employee—by failing to demonstrate fitness or qualifications—and provides that the agency must notify the employee in writing as to why he is being separated.

As to the government’s contention that agencies have broad discretion to terminate probationary employees, the court explained that “this discretion is available only in the context of the three authorized methods for terminating probationary employees, as previously discussed.”

RIFs. Even if there were some additional methods by which the defendant agencies could terminate probationary employees, the court again found they conducted RIFs. “In addition to the evidence previously cited by the Court, new information entered into the record since the TRO was issued confirms and strengthens the Court’s conclusion that RIFs occurred. The Court also concludes that RIFs occurred at three additional Defendant Agencies.”

For example, not only did the agencies sometimes refer to the actions as RIFs, the GSA told a terminated employee to “direct [their] inquiries to rif@gsa.gov.” Further, said the court, the record reflected that the terminations were effected by means of form letters terminating employees en masse, despite their good performance. In addition, an OPM memorandum indicating that it had “asked that [agencies] separate probationary employees that [they] ha[d] not identified as mission-critical no later than end of the day Monday, 2/17,” and stating that “OPM believes ‘qualifications for continued employment’” in the current context means that only the highest-performing probationers in mission-critical areas should be retained,” indicated that terminations were aimed at the reduction of probationary employees across the board.

The government’s own briefing, the court next observed, in which it stated that the terminations were conducted due to a lack of work and/or funds and that the agencies have been reorganizing their workforces, indicates that the terminations were RIFs. While the court agreed that agencies may assess employees’ utility in light of agency priorities and resource constraints, “when they eliminate positions due to lack of work, funding, or a reorganization, as was the case here, they must use the RIF procedures,” it explained.

Three defendant agencies. Though the court had previously found that the states had failed to show a likelihood of success on the merits with respect to three defendant agencies—Defense, Archives, and OPM—it now found they carried their burden of showing RIFs occurred at those agencies. Specifically, they provided declarations from terminated employees from each of those agencies, similar to those provided earlier for other defendant agencies, along with additional information that bolstered their contention.

Notice. Turning to the notice requirement, the court noted that given “the sheer number of terminated employees, it is implausible that fewer than fifty people were terminated through a RIF at each of the Defendant Agencies, save Archives.” As to Archives, although the court concluded that it likely conducted RIFs, it was unable to conclude at this time that the states were entitled to notice with respect to Archives employees.

As to when a state is due notice, the court found it turns on whether 50 or more employees in a competitive area are terminated, and whether any one employee either lives or works in that state. Here, the court found that states are due notice regardless of whether there would be enough layoffs in the state to qualify as a “mass layoff” event. And while neither the RIF statute nor the accompanying regulations expressly say which states are due notice when 50 or more people in a competitive area are terminated, the court found that “the best reading is that any state in which an employee in the competitive area lives or works should be given notice.”

This is so, said the court, because under the Workplace Innovation and Opportunity Act, “a state’s rapid-response activities are tied (as relevant here) to the presence of a ‘mass layoff... or other disaster, that results in mass job dislocation.’” Moreover, the WIOA and its implementing regulations, observed the court, “do not appear to draw a distinction between a state whose workers suffer a mass layoff and one whose residents suffer a mass layoff.”

Accordingly, the court found that a state is entitled to notice of a RIF if 50 or more people in a competitive area are terminated and any employee within that competitive area resides or works in the state.

Entitlement. Further, the court found that the plaintiff states were due notice as the defendant agencies conducted RIFs and they involved at least 50 people in a competitive area. “Thus, any States in which those employees lived or worked were due notice, which it is undisputed that no Plaintiff State received.” The court extended this conclusion to Connecticut, Hawai’i, Nevada, Vermont, and Wisconsin, which had not provided specific evidence they have a terminated employee working or living in the state, noting that for the purposes of a preliminary injunction, it is likely that each plaintiff state was entitled to notice.

Irreparable harm. Next, the court found that all states likely have suffered and will imminently suffer irreparable harm. And while the harms are largely economic in nature “in the sense that the harms involve substantial costs associated with the Government’s lack of notice,” the court found they were irreparable. Not only are the states unlikely to be able to recover money damages at the time of judgment to remedy their harms, even if “damages were available, they would be incredibly difficult to ascertain given the multifaceted and complex nature of the impacts of the Government’s actions on the Plaintiff States.” The court also found the “harm irreparable because the information to be provided by the Defendant Agencies is time sensitive and the harm itself is temporal and immediate.”

Balance of equities and public interest. As to the balance of equities and public interest factors, the court noted that it had previously found they weighed in favor of injunctive relief. Incorporating that analysis by reference here, it continued to find they weigh in favor of such relief.

Scope of relief. Finally, as to the scope of relief, the court noted that while it had previously determined that nationwide relief was necessary to prevent irreparable harm and preserve the status quo until there was time for a full preliminary injunction hearing, it now found that narrower relief was appropriate. Specifically, it found that “it is possible to substantially stop the harms inflicted on the states that did sue without extending judicial authority over those that didn’t.” Accordingly, it entered a “preliminary injunction restoring the employment of those federal probationary workers whose sudden layoffs without requisite notice likely have harmed, are harming, and will continue to harm the Plaintiff States if not immediately stopped.”

The case is No. JKB-25-0748.

Judge: Bredar, J.

Attorneys: Virginia Anne Williamson, Maryland Office of the Attorney General, for State of Maryland. Beatrice C. Thomas, U.S. Attorney's Office, for U.S. Department of Agriculture.

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