In a sweeping decision that has sent ripples through Washington and beyond, a federal judge has ordered the Trump administration to reinstate hundreds of federal employees dismissed during the recent government shutdown and to halt any further layoffs. The ruling, delivered by Judge Susan Illston of the U.S. District Court for the Northern District of California, marks a significant judicial check on executive authority and underscores the ongoing tension between the White House, Congress, and federal worker unions over the fate of the public workforce.
The roots of this legal standoff trace back to the 43-day partial government shutdown that began on October 1, 2025. The shutdown, triggered by a deadlock in Congress over health care subsidies, quickly escalated into the longest in U.S. history. During this period, President Donald Trump departed from the usual practice of furloughing non-essential workers, instead asserting his authority to terminate federal employees outright—a move that drew swift condemnation from labor unions and Democratic lawmakers alike.
As reported by Federal News Network, the administration’s actions led to reductions in force (RIFs) across several agencies, including the Departments of Education and State, the Small Business Administration (SBA), and the General Services Administration (GSA). Notices of termination were dispatched to employees, with separations scheduled to take effect in October and November, right in the throes of the shutdown. The American Federation of Government Employees (AFGE) and the American Foreign Service Association (AFSA), representing those affected, promptly launched a lawsuit challenging the legality of these layoffs.
The legal landscape shifted dramatically on November 12, 2025, when Congress passed a continuing resolution to end the shutdown. The legislation included explicit language: between November 12, 2025, and January 30, 2026, no federal funds could be used to “initiate, carry out, implement, or otherwise notice a reduction in force to reduce the number of employees within any department.” Additionally, it declared that any RIF “proposed, noticed, initiated, executed, implemented, or otherwise taken by an executive agency between October 1, 2025, and the date of enactment, shall have no force or effect.”
Despite this clear mandate, the Trump administration interpreted the law narrowly, only reinstating employees who received RIF notices between October 1 and November 12. It maintained that layoffs initiated before the shutdown but executed during the continuing resolution period were lawful. This interpretation, however, did not hold up in court.
Judge Illston’s preliminary injunction, signed on December 17, 2025, unequivocally ordered the Departments of Education and State, the SBA, and the GSA to rescind RIF notices for employees terminated between October 1 and November 12. The agencies were given until December 23 to comply or appeal the ruling. Illston wrote, “Defendants must do what the continuing resolution says. They may not take any further steps to implement or carry out a RIF through January 30, 2026, regardless of when the RIF notice first issued.” (Federal News Network)
The scope of the order is substantial. Approximately 680 federal employees stand to benefit, including nearly 250 Foreign Service officers at the State Department, 200 employees at GSA, 150 at the Education Department’s Office for Civil Rights, and nearly 80 at the SBA. The court had previously issued a temporary restraining order blocking layoffs of Foreign Service officers, but Illston’s latest decision broadens protection to hundreds more.
At the heart of Judge Illston’s ruling was her assessment of the “chaotic” and harmful nature of the layoffs. She noted that some employees were told they would not be fired, only to be dismissed days later, resulting in what she described as “whiplash” and real harms such as interruptions to health care coverage and financial hardship. “The situations that have brought this matter to court are truly extreme and require immediate action in my view,” Illston stated during the hearing (Roll Call).
Union representatives welcomed the decision as a crucial victory. Everett Kelley, National President of the AFGE, declared, “When Congress voted to end the longest government shutdown in history, it spoke clearly and unambiguously that further reductions-in-force were prohibited, and any RIFs that occurred during the shutdown were required to be reversed. The administration’s continued defiance of that mandate is part of a troubling pattern of egregious actions against federal employees and the American public.” John Dinkelman, president of the AFSA, echoed this sentiment, emphasizing that “reductions in force were prohibited” and that the administration’s efforts to proceed with RIFs were “unlawful.”
Attorneys for the unions, including Danielle Leonard, argued that Congress’s intent was unmistakable. “We have Congress stepping in here and being incredibly clear about what the public interest needs in this very circumstance, and the public interest is in restoring these employees to their employment status and giving them clarity,” Leonard said.
On the other side, the Trump administration’s legal team, led by Justice Department attorney Brad Rosenberg, contended that rescinding the layoffs would be “logistically a big lift” for agencies, especially if higher courts later reversed the injunction. Rosenberg warned, “If a RIF is rescinded, and if this court either decides at final judgment in this case, or if the government were to appeal, and an appellate court were to stay or vacate this Court’s preliminary injunction, government agencies would presumably have to start all over again with that, with that process, and it would be awfully hard to unscramble that egg.”
The administration further argued that employees should seek redress through the Merit Systems Protection Board, a venue for individual employment disputes. Yet, union attorneys countered that the harm was widespread and systemic, warranting decisive judicial intervention.
Judge Illston, for her part, dismissed the government’s logistical concerns, remarking that agencies “should have been lifting since the statute was passed.” She also indicated that a brief delay in the order’s implementation could be allowed to give the administration time to consider an appeal, aiming to minimize the disruptive “whiplash” for employees already caught in a cycle of uncertainty.
Beyond the immediate impact on hundreds of federal workers and their families, the ruling carries broader implications for the balance of power in Washington. It highlights the judiciary’s role in checking executive overreach and ensuring compliance with congressional mandates. As noted by observers, including those in allied nations such as Türkiye, the episode underscores the value of stable and predictable governance frameworks in international partnerships.
As the December 23 deadline for compliance approaches, all eyes are on the Trump administration’s next move—whether it will appeal the ruling or comply with the court’s order to reinstate the affected employees. For now, federal workers and their advocates are celebrating a hard-won affirmation of their rights and the rule of law, even as the political and legal battles over the federal workforce continue to simmer.