Feds drop appeal challenging court order halting federal layoffs

SAN FRANCISCO (CN) — The Ninth Circuit Court of Appeals on Friday dismissed an appeal by the Trump administration to overturn a lower court’s order halting impending federal reductions-in-force.

The government filed an unopposed motion on Dec. 31 to voluntarily dismiss its appeal, without explaining why it was abandoning the effort.

On Dec. 17, U.S. District Judge Susan Illston issued a preliminary injunction extending a block on impending federal reductions-in-force, ruling that certain agencies violated a congressional prohibition by notifying employees of separation in early December.

The order barred the Office of Personnel Management, the Office of Management and Budget, the State Department and the Department of Education from proceeding with any reduction-in-force actions, including separating employees from their jobs, through at least Jan. 30.

It also rescinded any RIFs implemented between Oct. 1 and Nov. 1 and ordered affected employees at those agencies, as well as the General Services Administration and Small Business Administration, to be reinstated to their Sept. 30, 2025, positions with full back pay.

The Bill Clinton appointee also built a five-day window into her ruling to allow the government to consider an appeal and implement the order, mirroring the timeframe Congress provided for agencies to remedy RIF notices issued during the shutdown.

The government filed an emergency appeal on Dec. 22, asking the Ninth Circuit to stay the provision of Illston’s order requiring agencies to rescind RIF notices and notify affected employees of the rescissions by Dec. 23.

“If that provision is not stayed, and the agencies are required to rescind the challenged RIFs, they would need to start the RIF process anew even if the RIFs are ultimately upheld,” the government said in its motion.

On Dec. 23, a Ninth Circuit Court of Appeals panel — comprised of U.S. Circuit Judges Michelle T. Friedland, a Barack Obama appointee; Patrick J. Bumatay, a Donald Trump appointee; and Anthony D. Johnstone, a Joe Biden appointee — granted a stay of the specific provision, but noted they were not blocking the remaining parts of the order.

“We construe the remaining provisions of the preliminary injunction, which we do not administratively stay, as sufficient to ensure that those who received the RIF notices will be shielded from the effects of the challenged RIFs during the pendency of this appeal,” the panel said.

The case was scheduled for oral arguments on Jan. 15.

A representative for the Department of Justice did not respond to a request for comment.

A representative for Democracy Forward, a law firm representing the plaintiffs, declined to comment.

The American Federation of Government Employees and the American Foreign Service Association filed an emergency motion on Dec. 3 after the State Department notified certain employees by email on Dec. 1 that they would be separated on Dec. 5.

Hours before the planned separations, Illston issued a temporary restraining order blocking the firings, finding they would likely violate a law prohibiting shutdown-related terminations.

Section 120 of the continuing resolution that ended the 43-day government shutdown bars federal agencies from using any funds to initiate or carry out reductions in force — including issuing layoff notices — from Nov. 12, 2025, when President Donald Trump signed the law, through Jan. 30, 2026.

At the Dec. 17 preliminary injunction hearing, Justice Department attorney Brad Rosenberg argued federal employees had known about their separations for months, as the RIF notices at issue in this case predate the government shutdown, and that the terminations were “merely the administration trying to carry out its policy objectives.”

In contrast, the plaintiffs argued the prohibition of RIFs through Jan. 30 was Congress’ policy preference passed in the continuing resolution, which the president signed into law.

“Congress was also very clear, requiring any RIF on which the agencies took any action to be invalid,” Robin Tholin of Altshuler Berzon, an attorney for the plaintiffs, said.

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