Judge’s Order Saps Trump’s Legal Case for Shutdown Layoffs

A district court judge torpedoed the Trump administration’s argument for firing federal workers during the government shutdown, throwing up new legal barriers that may prove difficult for the president’s attorneys to overcome.

Judge Susan Illston of the US District Court for the Northern District of California found that a memo from the White House’s budget office claiming the administration could cut workers at will during the shutdown “plainly oversteps the Executive’s boundaries, pushing aside Congressional mandates without explanation.”

In rejecting the government’s claim, Illston gave the union plaintiffs an early legal victory that lays bare flaws in the administration’s defense of how it enacts workforce policies.

“It’s pretty breathtaking,” said Dan Meyer, a federal employment attorney and partner at Tully Rinckey. “But it’s limited time-wise because it’s a preliminary injunction.”

Illston’s Oct. 28 order not only stops the government from proceeding with layoffs for the foreseeable future, it also prohibits officials from issuing any new reduction-in-force notices during the ongoing shutdown.

President Donald Trump fired 4,100 workers 10 days into the shutdown, blaming Democrats and promising more cuts if the standoff continued. The deepest came at the Treasury Department, where about 1,500 people were laid off, along with hundreds at the departments of Education, Commerce, and Housing and Urban Development. Health and Human Services laid off more than 1,000, though the department later said several hundred notices were sent by accident.

OMB Director Russell Vought previously said that the number of layoffs could exceed 10,000. His office instructed agencies to review their operations for potential cuts during the shutdown.

The court block comes at a critical time for Trump as other levers of government remain frozen due to political infighting. An appeal is all but certain, with higher courts expected to delve into the intricacies of the Administrative Procedure Act and the Antideficiency Act—the latter of which Department of Justice attorneys have already sought to use, unsuccessfully, to defend the administration’s actions.

Illston, a Clinton appointee who has sided with unions in previous federal worker layoff cases, agreed that the latest cuts were motivated by political revenge. She wrote that government shutdowns aren’t a legal basis for firing workers, rejecting the administration’s argument that a lapse in funding gave Trump expanded authority to fire anyone and everyone.

“The agencies sharply depart from historical practice, unilaterally acting out President Trump’s and OMB Director Vought’s retaliatory and partisan ‘policy goal’ of punishing Democrat-oriented agencies amid a government shutdown,” she wrote, referring to the White House Office of Management and Budget.

APA Fight

Illston homed in on the APA, which requires the government to take certain procedural steps before finalizing major decisions.

The administration’s actions were “the epitome of hasty, arbitrary and capricious decisionmaking,” she wrote, quoting the statute. Illston rejected the Trump administration’s argument that the reductions-in-force were a management decision not subject to the law’s requirements.

The political nature of the firings bolsters the argument that they were arbitrary and capricious, she wrote, adding that the union plaintiffs’ argument would likely succeed.

The government argued that the unions lack a cause of action under the Antideficiency Act, saying disputed decisions like reductions-in force should be redirected to federal employment boards. The law “expressly contemplates funding shortages as a basis for RIFs,” Illston wrote, rejecting the idea that the temporary lapse in appropriations is the same as Congress cutting agency funding.

Her decision shows that the president “can’t ignore constitutionally approved, congressionally appropriated positions,” Tom Devine, legal director for the Government Accountability Project, said.

She also noted the chaotic nature of some of the mass firings showed little forethought went into them. For example, accidental layoff notices were sent to 800 HHS workers, while undeliverable ones were issued to employees locked out of their work email accounts.

The American Federation of Government Employees, the main union plaintiff, is also likely to succeed in the court of appeals, in part because Trump and his budget director have undercut their own legal team, Meyer said.

Illston cited Trump’s comments that he’d target programs favored by Democrats, including the president’s social media posts and a favorable comparison of Vought to iconic Star Wars villain Darth Vader.

“Any time you talk and you’re in the executive branch, you’re laying down evidence,” Meyer said. “This is another example of how, when you take managerial actions, you should keep your mouth shut.”

But the union’s chances before the US Supreme Court are less clear. The conservative majority has sided with Trump by pausing rulings in other workforce cases, including a July decision that allowed mass firings to continue at 19 agencies while appeals moved forward.

The case is AFGE v. OMB, N.D. Cal., 3:25-cv-08302.