Unions win TRO halting federal layoffs amid shutdown

A federal judge in San Francisco granted a temporary restraining order Wednesday against government agencies that plaintiffs claim are planning to lay off federal workers during the government shutdown.

A coalition of major federal employee unions filed a lawsuit in federal court on Sept. 30 to block the Trump administration from carrying out what they describe as an unlawful plan to use a government shutdown to fire large numbers of civil servants.

Senior U.S. District Judge Susan Illston enjoined government agencies from issuing reduction-in-force (RIF) notices to employees in programs that lose discretionary funding because of the ongoing government shutdown.

The order covers any RIF notices issued from Oct. 10. The shutdown began on Oct. 1 after the Senate failed to pass a continuing resolution to fund the government temporarily. American Federation of Government Employees, AFL CIO et al v. United States Office of Management and Budget et al. 3:25-cv-08302 (N.D. Cal. filed Sept. 30, 2025).

Justice Department lawyers said the plaintiffs "ignore fundamental limitations" on the courts' power to intervene in federal employment disputes, in response to the motion for a temporary restraining order.

The administration contends that the requested emergency order is both unnecessary and unlawful.

"Plaintiffs fail to establish irreparable harm," Justice Department lawyers wrote in response to the motion for a temporary restraining order. "Their asserted harms--which stem from future loss of federal employment--would not take place until weeks or months from now, if at all."

Any employment losses could be remedied later through reinstatement and back pay under existing civil service procedures, the DOJ attorneys added.

"If actually losing employment is not an irreparable harm, then getting a message to lose employment is also not an irreparable harm," Department of Justice attorney Elizabeth Hedges said at Wednesday's hearing.

Illston asked Hedges multiple times to provide details on the merits of the government's case but she refused to.

"I'm not going to discuss them today," Hedges said. "We may be able to address them at a later date."

After issuing the order, Illston said, "It would be wonderful to know what the government's position on the merits of this case is. I am waiting with bated breath."

Hedges also argued that government agencies are "not in the universe to act on RIFs" and that "they're not doing the things that plaintiff is alleging."

"Emergency equitable relief is not appropriate here," Hedges added.

An attorney for the plaintiffs, Danielle Leonard of Altshuler Berzon LLP, said at the hearing her team had "not had time to investigate what's going on" at all affected agencies.

Leonard said the government's intention to lay off workers was "arbitrary and capricious."

The temporary restraining order against the Office of Management and Budget (OMB), the Office of Personnel Management (OPM) and other federal agencies argued that the administration's plan to issue RIF notices in the middle of a shutdown violates federal law, the Administrative Procedure Act, and constitutional limits on presidential power.

According to the unions' filings, the OMB issued a "Lapse Memorandum" on September 24 directing agencies to identify programs with lapsed discretionary funding and target them for layoffs if they are "not consistent with the President's priorities."

The OPM followed days later with new guidance allowing agencies to treat RIF planning as "excepted" work during the shutdown -- meaning employees could be required to work on layoffs even while most government functions are frozen, according to the plaintiffs' filings.

The unions -- including the American Federation of Government Employees and the American Federation of State, County and Municipal Employees -- said in court filings that public statements by President Donald Trump and OMB Director Russell Vought show the plan is overtly partisan.

Trump has said the layoffs would target "Democrat agencies" and promised to use the shutdown to make "irreversible" cuts, according to the plaintiffs' filings.

The unions contend in their filings that the administration is misinterpreting the Antideficiency Act, which prevents federal agencies from spending or obligating more money than Congress has appropriated.

Congress has not passed a bill to fund the government through Nov. 21, leading President Donald Trump's administration to argue that many federal agencies and programs are currently not funded by Congress.

The ninth Senate vote on the stopgap measure failed 51-44 on Wednesday.

Historically, federal workers are either furloughed or required to work without pay during a shutdown, then receive back pay once funding is restored, the plaintiffs' filings said. They claimed RIFs have never been used during a shutdown.

The lawsuit argues that OMB and OPM have "exceeded statutory authority, acted contrary to law, and acted in an arbitrary and capricious manner" by directing agencies to issue layoffs in this context.

"This is not only unlawful; it's politically motivated retribution," the plaintiffs argued in their papers.