Unions, Trump administration reach deal: No mass firings during government shutdowns

Federal employee unions and the Trump administration have settled litigation over mass layoffs ordered during last year's government shutdown, with the government agreeing to rescind the memo directing agencies to fire workers mid-shutdown. Workers who received reduction-in-force notices had already been reinstated under a prior injunction.

The dispute began in October 2025 when OMB Director Russell Vought announced on social media that layoffs had begun, and roughly 4,200 employees across at least seven agencies received notices. U.S. District Judge Susan Illston blocked the firings, and the injunction was later reinforced by the deal that ended the 43-day shutdown, which explicitly barred RIFs.

The Justice Department had argued the layoffs were long-planned policy, not shutdown retaliation. The unions, including AFGE, AFSCME and AFT, called it an attempt to use furloughed workers as leverage in a budget fight, and the case is now paused until year's end rather than fully resolved.

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