Supreme Court Clears Path for Trump’s Federal Workforce Cuts

The U.S. Supreme Court has reversed a court order, allowing federal agencies across government to resume laying off workers and drastically reducing staff.  

President Trump’s original executive order and memorandum, the “Department of Government Efficiency” Workforce Optimization Initiative included guidance for staff reduction, including a general standard that no more than one employee should be hired for every four employees that depart, removing underperforming employees, and allowing term or temporary positions to expire without renewal. 

In the executive order, President Trump required that “Agency Heads shall promptly undertake preparations to initiate large-scale reductions in force (RIFs), consistent with applicable law.” 

U.S. District Judge Susan Illston in San Francisco halted the layoffs, ruling in late May that the approximately 20 affected agencies will not be able to function as Congress intended. 

According to USA Today, in an unsigned and brief opinion issued Tuesday, the Supreme Court justices said they are not ruling on the legality of a specific reorganization plan. The Supreme Court said the district judge was wrong to stop the Trump administration from moving ahead with such plans. Justice Ketanji Brown Jackson dissented, calling it the “wrong decision at the wrong moment, especially given what little this Court knows about what is actually happening on the ground.” 

When the U.S. Court of Appeals for the 9th Circuit turned down the Trump administration’s request to temporarily pa Executive Branch’s internal operations and unquestioned legal authority to plan and carry out RIFs, and does so on a government-wide scale.” 

In late April, U.S. District Judge Amy Berman Jackson temporarily halted the Trump administration’s mass layoffs at the Consumer Financial Protections Bureau (CFPB), shortly after an appeals court narrowed an earlier injunction. Judge Berman Jackson’s order temporarily blocked the terminations, which would have slashed the CFPB’s workforce by roughly 90%. Judge Berman Jackson’s order comes after plaintiffs in the case, which include the CFPB Employee Association and other labor entities, accused the government of violating an earlier injunction. 

The case landed at the Supreme Court after a district judge in California ruled in favor of the unions, municipalities and advocacy groups that sued over Trump’s workforce reduction plans and an appeals court subsequently allowed that ruling to remain in place.  

According to Government Executive, agencies that had already sent out RIF notices— use Illston’s order, U.S. Solicitor General D. John Sauer came to the Supreme Court in early June, asking the justices to intervene. Sauer contended that the order “inflicts ongoing and severe harm on the government” because it “interferes with the including the U.S. Departments of Health and Human Services and Education—can now finalize the offboarding of thousands of staff. Other federal departments, including the Departments of Interior, Agriculture and State, are expected to quickly send out notices of their own to thousands of employees.  

“The plans themselves are not before this Court, at this stage, and we thus have no occasion to consider whether they can and will be carried out consistent with the constraints of law,” wrote Justice Sonia Sotomayor. 

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Picture of Eric C. Peck

Eric C. Peck

MortgagePoint Managing Digital Editor Eric C. Peck has 25-plus years’ experience covering the mortgage industry. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career in New York City with Videography Magazine before landing in the mortgage finance space. Peck has edited three published books, and has served as Copy Editor for Entrepreneur.com.
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