Treasury Seeks Friendly Court in Suit With Federal Worker Union

The National Treasury Employees Union and attorneys for the government will battle for a second time this week, asking a Kentucky district court to consider an unusual lawsuit from the Trump administration that seeks to invalidate the union’s collective bargaining agreement.

The government is aiming to convince the US District Court for the Eastern District of Kentucky to bless its cancellation of union contracts with millions of workers, though due to procedural irregularities the focus of a hearing Friday remains uncertain.

Legal observers say the administration’s methods, as well as actions taken by the district judge, call the legitimacy of the litigation into question.

Last month the Trump administration sued NTEU Local 73, a small local representing employees for the Internal Revenue Service in Covington, Ky., seeking a declaration from the court that it could exclude the IRS from collective bargaining protections under federal labor law for national security reasons. The administration filed a nearly identical lawsuit against a local of the American Federation of Government Employees in the US District Court for the Western District of Texas.

The unorthodox move for the government to proactively bring litigation against the unions could prove to undo its own arguments. AFGE said in its motion to dismiss that the government lacks standing to sue because it filed the litigation before Trump’s executive order went out.

“The government drafted an executive order and, before the subjects of that order even knew what it said, sued them, doing so before any actual controversy could have possibly existed,” the union said.

Suzanne Summerlin, a federal worker-side attorney, said the tactic was likely designed to place the disputes with conservative judges in friendly judicial circuits.

‘Inflexible’ Contracts

The actions come after President Donald Trump’s March 27 executive order declaring that dozens of agencies and sub-agencies serve primarily a “national security” purpose, rendering them ineligible for unionization and collective bargaining rights.

The administration said in its lawsuit that the contracts impeded the president from enacting policy in a way that inhibits national security. The IRS conducts national security work by collecting taxes that fund the military, the government said.

“When inflexible CBAs obstruct presidential and agency head capacity to ensure accountability and improve performance, all citizens pay the price,” according to the complaint. “The price is particularly intolerable when national security is on the line.”

NTEU, AFGE, and a union representing foreign service members launched their own litigation against the executive order. A US District Court for the District of Columbia judge seemed poised to grant a preliminary injunction halting Trump’s order during a hearing in NTEU’s countersuit Wednesday.

Procedural Controversy

District Judge Danny Reeves, who is overseeing the NTEU case in Kentucky, is also drawing scrutiny for how he’s handling the government’s lawsuit against union.

Reeves, a George W. Bush appointee, scheduled a hearing to address the government’s request for declaratory relief, even though it hasn’t filed motions for a preliminary injunction or a temporary restraining order. The union is also alleging in court briefing that Reeves scheduled the hearing before the union had been served or retained counsel.

Reeves overrode NTEU’s motion to postpone the hearing and set a briefing schedule.

The Department of Justice didn’t immediately respond to requests for comment. NTEU attorneys declined to comment on the case until after Friday’s hearing.

Jordan Laris Cohen, a labor law and civil procedure professor at Hofstra University, said a plaintiff will typically file a motion for a PI or TRO if they’re seeking fast relief from the court. The docket doesn’t show any such filing, so Reeves could be treating the complaint itself as a PI motion, Cohen said.

“If the court is anticipating granting any kind of relief other than a briefing schedule as a result of this hearing, that would be extremely odd,” he added.

Emily Margaret Hall, the Justice Department attorney representing the government in the D.C. District Court case and the Kentucky case, said during NTEU’s for a preliminary injunction proceedings Wednesday that they’re “not sure what the hearing is about.”

Summerlin said she’s expecting Reeves to issue an order declaring NTEU’s CBA void to get out in front of the D.C. judge.

“The idea that you can be hauled into federal court, not properly served, not given time to prepare, not even be the right party, and still be expected to argue for the survival of your national labor agreement, that is chilling,” she said.

NTEU again motioned to postpone the hearing on Tuesday, seeking clarification from Reeves over its subject.

Reeves denied the motion again on Wednesday, but said that he would set aside three hours of oral argument to consider “the issues presented in the case,” and NTEU’s motion to dismiss along with the government’s motion for summary judgment.

The case is Dep’t of Treasury v. Nat’l Treasury Employees Union Chapter 73, E.D. Ky., No. 2:25-cv-00049, oral argument scheduled 4/25/25.