Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—N.D. Cal.: Further RIFs and reorganization of the executive branch preliminarily enjoined, (May 28, 2025)

By Kathleen Kapusta, J.D.

“Put simply, in this case, defendants want the Court to either declare that nine Presidents and twenty-one Congresses did not properly understand the separation of powers, or ignore how the executive branch is implementing large-scale reductions in force and reorganizations.”

Granting a preliminary injunction requested by a collection of unions, nonprofit organizations, and local governments that challenged the Trump administration’s ongoing layoffs of federal workers pursuant to Executive Order 14210, which directs federal agency heads “to initiate large-scale reductions in force (RIFs)” focusing on the President’s agency reorganization priorities, a federal court in California explained that agencies “may not conduct large-scale reorganizations and reductions in force in blatant disregard of Congress’s mandates, and a President may not initiate large-scale executive branch reorganization without partnering with Congress.” Not only was the injunction necessary to preserve the status quo and protect the power of the legislative branch, “the President,” the court observed, “likely must request Congressional cooperation to order the changes he seeks” (American Federation of Government Employees, AFL-CIOv. Trump, No. 25-cv-03698-SI (N.D. Cal. May 22, 2025)).

In response to EO 14210, which was issued on February 11, the directors of OMB and OPM instructed agency heads to submit Agency RIF and Reorganization Plans (ARRPs) for review and approval. In response, multiple agencies initiated large-scale RIFs, sending RIF notices to employees and sometimes placing them on administrative leave until the termination date set by the RIF.

Prior proceedings. In their subsequent lawsuit challenging the layoffs, the plaintiffs alleged that the EO is ultra vires and usurps Congressional authority in violation of the Constitution’s separation of powers; that OMB, OPM, as well as DOGE acted ultra vires or beyond their authority in implementing the EO; that OMB and OPM violated the Administrative Procedure Act (APA) in several ways; and that the federal agency defendants’ ARRPs also violate the APA.

The plaintiffs requested a TRO, which the court granted. The plaintiffs then moved for a preliminary injunction.

Likelihood of success on the merits. After finding that at least some collection of the plaintiffs have sufficient standing to bring their claims and that it had subject matter jurisdiction over the claims, the court turned to the preliminary injunction factors, and specifically whether plaintiffs established they are likely to succeed on the merits of their claims. Here, the court found the plaintiffs were likely to succeed on their claim that the EO is ultra vires, “as the President has neither constitutional nor, at this time, statutory authority to reorganize the executive branch.”

Noting that Article I of the U.S. Constitution vests legislative power in Congress, the court explained that “the President may broadly restructure federal agencies only when authorized by Congress.” Indeed, said the court, the “simple proposition that the President may not, without Congress, fundamentally reorganize the federal agencies is not controversial: constitutional commentators and politicians across party lines agree that ‘sweeping reorganization of the federal bureaucracy requires the active participation of Congress.’” Thus, in implementing Executive Order 14210, the President usurped for himself the power to restructure entire federal agencies, the court stated.

Agency actions. As to the plaintiffs’ assertion the actions by OPM, OMB, and DOGE in implementing the EO are ultra vires and therefore unlawful, the court found the evidence presented by the plaintiffs suggested that the agencies were acting at the direction of the President and his team and not, as the defendants argued, merely providing guidance about how agencies should conduct RIFs. And while the defendants argued that federal law expressly permits RIFs, the RIFs at issue, said the court, “appear inextricably intertwined with broad agency reorganization, which the President undoubtedly cannot undertake without Congress.”

Further, rather than being permissive, the EO and the OMB/OPM memo directing the RIFs mandate that the agencies undertake preparations to initiate large-scale RIFs and the memo interprets the EO as a directive. “Like other directives from the current administration, the Court finds the memo ‘amounted to a command, not a suggestion.’” Accordingly, the court concluded that the plaintiffs were likely to succeed on the merits of the claim alleging that the EO usurps Congress’s Article I powers and exceeds the President’s lawful authority and their ultra vires claims against OPM, OMB, DOGE, and their directors.

APA claims. Turning to the plaintiffs’ APA claims, the court found the evidence indicated that the challenged actions were final agency actions under the APA. It refrained, however, from opining on whether DOGE’s actions are subject to review under the APA. It also reserved ruling on the merits of the APA claim asserting arbitrary and capricious action by OMB, OPM, and DOGE and the APA claims asserted against the federal agency defendants.

As to their claim OMB, OPM, DOGE, and their directors violated the APA by taking action not in accordance with law and exceeding statutory authority, the court found that it overlapped with the analysis of the ultra vires claim and for the reasons already stated, the plaintiffs have shown a likelihood of success on their claim that at least OPM and OMB are acting outside their statutory authority by directing large-scale layoffs and reorganizations at other federal agencies. Further, said the court, the plaintiffs have shown a likelihood of succeeding on their claim that OPM and OMB engaged in rulemaking without notice and comment required by the APA in issuing the OMB/OPM memo and in approving the ARRPs.

Irreparable harm. Regarding irreparable harm, the court explained that it was “not considering the potential loss of income of one individual employee, but the widespread termination of salaries and benefits for individuals, families, and communities.” And given the scale and speed of the defendants’ actions, the court explained, “if the reorganization continues, the agencies will not easily return to their prior level of operations. This is irreparable harm.”

After concluding that the final factors also weighed in favor is issuing an injunction, the court barred the agency defendants from taking any actions to implement or enforce specified sections of the EO. It also found that the status quo in this case, for purposes of an injunction, is the situation prior to the February 11 issuance of the EO but found its ability to impose retrospective relief was limited by practical considerations. Thus, it ordered that “federal agency defendants (1) rescind any RIFs issued pursuant to Executive Order 14210 and (2) transfer any federal employees who were moved into administrative leave status to effectuate Executive Order 14210 back to the status they held prior to being placed on such leave; but the Court STAYS these two components of retrospective relief for the duration of any appeal of this injunctive order.”

The case is No. 25-cv-03698-SI.

Judge: Illston, S.

Attorneys: Aaron Schaffer-Neitz (Altshuler Berzon) for American Federation of Government Employees, AFL-CIO. Andrew Marshall Bernie, U.S. Department of Justice, for Donald J. Trump.

Companies: American Federation of Government Employees, AFL-CIO

Cases: RemediesDamages Procedure Discharge PublicEmployees FedTracker LaborEmployment DOGE CaliforniaNews