Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—N.D. Cal.: RIFs issued during government shutdown put on hold, (Dec 18, 2025)

By Todd Harrison, J.D.

As part of the continuing resolution ending the longest federal government shutdown in history, Congress paused further federal layoffs into the new year and ordered that laid off employees be reinstated.

Granting a motion for preliminary injunctive relief brought forth by several labor unions representing federal workers, a federal district court in California determined that the government agencies’ RIF actions were in contravention to the continuing resolution passed by Congress ending the government shutdown. The court found that the government may not take any further steps to implement or carry out a RIF through January 30, 2026, regardless of when the RIF notice first issued. Further, the government must rescind RIF notices for employees who were terminated between October 1, 2025, and November 12, 2025, returning those employees to their September 30 job status with full back pay (AFSCME v. United States Office of Management and Budget, No. 25-cv-08302-SI (N.D. Cal. Dec. 17, 2025)).

Section 120. The continuing resolution passed by Congress ending the government shutdown contains Section 120(a), which provides in part that “no federal funds may be used to initiate, carry out, implement, or otherwise notice a reduction in force to reduce the number of employees within any department, agency, or office of the Federal Government.” Section 120(e) states that “any reduction in force proposed, noticed, initiated, executed, implemented, or otherwise taken by an Executive Agency between October 1, 2025, and the date of enactment, shall have no force or effect,” and that, “Any employee who received notice of being subject to such a reduction in force shall have that notice rescinded and be returned to employment status as of September 30, 2025, without interruption.”

Government interpretations. On November 12, 2025, the Office of Personnel Management (OPM) issued a memorandum to all agencies addressing Section 120. OPM instructed that the relevant portion of Section 120 only applied to RIFs issued between October 1 and November 12, 2025.

In addition, in emails sent to Foreign Service employees on December 1, 2025, the Office of Management and Budget (OMB) and the Department of Justice’s Office of Legal Counsel (OLC) provided “formal written guidance” that completing RIFs that were noticed prior to October 1, 2025, did not violate the continuing resolution or the Antideficiency Act.

Lawsuit. The plaintiffs filed this lawsuit on September 30, 2025, the day before the government shutdown, after OMB and OPM issued guidance authorizing federal agencies to conduct RIFs during the shutdown. On October 10, the shutdown RIFs began. The court issued a temporary restraining order, followed by a preliminary injunction.

On November 12, the shutdown ended. On December 3, the plaintiffs again moved for a temporary restraining order. The court granted the motion of December 4, pausing RIFs at the State Department after numerous employees whose RIF notices had expired received emails on December 1 that they would be terminated on December 5.

Here, the court considered the plaintiffs’ motion for a preliminary injunction along with three supplemental claims related to the continuing resolution: (1) the challenged actions are not in accordance with the law and exceeded statutory authority in violation of the APA; (2) the challenged actions are ultra vires; and (3) the challenged actions violate the Appropriations Clause.

Statutory text. After determining that it had jurisdiction and standing to hear the plaintiffs’ claims, the court turned to the plaintiffs’ likelihood of success on the merits. Because the likelihood of success on the merits turned on the interpretation of Section 120, the court began by analyzing the law.

Section 120(a). According to the government, Section 120(a) only prohibits the “noticing” of new RIFs between November 12, 2025, and January 30, 2026, but RIFs noticed prior to the shutdown may be allowed to play out now. The plaintiffs argued that the government is violating Section 120(a) by taking steps to complete RIFs before January 31, 2026, contending that Section 120(a) prohibits the issuance or implementation of RIFs from November 12 through January 30, regardless of when the RIF was first noticed.

Looking to the language of the text, the court found that the verb “implement” denoted taking steps in ongoing RIF processes, not merely initiating new RIF notices, as the government suggested. Further, the court determined that the verb “carry out” did the same. Accordingly, Section 120(a) prohibits the spending of federal funds on implementing all RIFs through January 30, including RIFs first noticed prior to the government shutdown, said the court.

Statutory construction. The government leaned heavily on Section 120(a)’s reference to “otherwise notice a reduction in force,” arguing that the term “otherwise” “necessarily cabins the previously listed verbs as only prohibiting front-end administrative RIF actions.” In making this argument, the government invoked two canons of statutory construction: noscitur a sociis and the series-qualifier canon. The court found neither instructive.

First, under the canon of noscitur a sociis, a word is given more precise content by the neighboring word with which it is associated. However, this canon is typically applied where a word is capable of many meanings, explained the court. In this instance, the court found that the terms of the statute were unambiguous, and thus it was not necessary to apply noscitur a sociis in the first place.

As to the series-qualifier canon, the government contended that “or otherwise notice a reduction in force” limits the preceding terms “initiate,” “carry out,” and “implement” because the listed acts are separated by a comma. However, the court determined that applying Section 120(a) to only those RIFs first “noticed” during the government shutdown would render the terms “implement” and “carry out” superfluous, and courts must give effect to every word of the statute when possible.

“Halt and reverse.” The court also rejected the government’s argument that the purpose of Section 120 was only to “halt and reverse” any RIF that was initiated because of or during the shutdown. In this case, the plain meaning of the statute was clear, and the result was reasonable. Section 120(a) prohibits any use of federal funds to “implement” or “carry out”—not just to “notice”—RIFs between November 12 and January 30, said the court. As such, the plaintiffs had shown a likelihood of success on their claim that OPM and OMB’s guidance, and the State and Education Department’s actions to separate employees pursuant to RIF notices issued earlier in the year, were contrary to Section 120(a).

Section 120(e). Next, the plaintiffs argued that the government violated Section 120(e) by failing to rescind RIFs executed during the shutdown and to restore those terminated employees to their September 30 employment status. The government argued that Section 120(e) only invalidates RIFs initiated during the government shutdown, not RIFs initiated before and unconnected to the lapse in appropriations.

To support its argument, the government again emphasized the word “otherwise” and the series-qualifier canon, and the court again found this narrow reading to be lacking for the same reasons it had previously stated.

Self-executing? With regard to the government’s contention that RIFs are “effectively self-executing” once notice is issued, the court explained that the record was clear that where an agency notices a RIF and then takes no further action, no formal separation occurs.

As such, the court determined that the plaintiffs were likely to succeed on their claim that the government’s failure to rescind RIFs executed, implemented, or re-noticed during the shutdown was contrary to Section 120(e).

Supplemental claims. Having concluded that the government’s interpretation of Section 120(a) and (e) was likely unlawful, the court found the plaintiffs were likely to succeed on the merits of their supplemental claims.

Irreparable harm. Turning to whether the plaintiffs were likely to suffer irreparable harm absent a preliminary injunction, the court answered in the affirmative, noting that what was at stake was more than lost income, pointing to the loss of health care coverage and the difficulties of restarting a career after spending decades working in the federal government.

Balance of interests. As to the balance of interests, the court stated that the government does not suffer irreparable harm by a temporary preservation of the status quo, and that granting the requested relief would serve the public interest as there is no public interest in the preservation of unlawful agency action.

Scope of remedy and order. The plaintiffs requested that the court enjoin the government from any further action to implement RIFs, including formally separating employees, through at least January 30. They further requested that the court order the government to rescind RIFs effectuated—or in the case of Education Department employees, re-noticed—between October 1 and November 12, and that employees terminated between those dates be reinstated to their September 30 job status with full back pay.

In response, the government argued that the plaintiffs’ motion should be denied because it seeks what amounts to “final relief” that the plaintiffs would win at the conclusion of this lawsuit in the form of a mandatory injunction.

The court noted that previously in this case, when granting a preliminary injunction to pause further RIFs during the government shutdown, it had declined the plaintiffs’ request to order that the RIF notices be rescinded. However, the situation presented now was markedly different given Congress’s instruction. Even assuming the government is correct that what the plaintiffs seek is a mandatory injunction, the court found this to be the rare case where the facts and law clearly favor the moving party and that such relief was appropriate in light of Congress’s guidance.

Accordingly, the court declined the government’s invitation that recission of RIF notices and reinstatement under Section 120(e) should not occur until the end of this lawsuit, building a five-day period into the injunction as to recissions and reinstatement while the government considers whether to appeal.

The case is No. 25-cv-08302-SI.

Judge: Illston, S.

Attorneys: Alice X. Wang (Altshuler Berzon) for American Federation of State County and Municipal Employees, AFL-CIO, American Federation of Government Employees, AFL-CIO [AFGE] and AFGE Local 3172. Elizabeth Themins Hedges, U.S. Department of Justice, for U.S. Office of Management and Budget, U.S. Office of Personnel Management and U.S. Department of Agriculture.

Companies: American Federation of State County and Municipal Employees, AFL-CIO; American Federation of Government Employees, AFL-CIO (AFGE); AFGE Local 3172

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