A federal judge has ordered the Trump administration to reinstate hundreds of federal workers fired during a government shutdown and blocked ongoing layoffs, delivering a sharp rebuke to the White House’s handling of workforce reductions.
U.S. District Judge Susan Illston of the U.S. District Court for the Northern District of California issued the ruling on December 17, 2025, requiring the government to provide full back pay to affected workers and halt further job cuts through late January.
The decision came during a hearing in a lawsuit brought by the American Federation of Government Employees, the American Foreign Service Association, and the National Federation of Federal Employees. The unions challenged the administration’s decision to continue firing workers despite explicit prohibitions in the law that ended the federal government shutdown.
Congress passed a short-term spending law on Nov. 12 that funds the government through Jan. 30. The legislation included two critical provisions: one prohibiting the government from taking steps to “initiate, carry out, implement, or otherwise notice a reduction in force,” and another requiring the rollback of shutdown-related firings.
Illston said the law “imposes a limitation on what the government can do, and the government did what it was ordered not to do.” She noted the chaotic nature of the firings, with some employees being told they would not be fired, only for the government to reverse itself days later.
“The situations that have brought this matter to court are truly extreme and require immediate action in my view,” Illston said.
The firings resulted in real harms such as interruptions to health care coverage, the judge observed during the hearing in San Francisco. She criticized what she characterized as the administration’s rushed approach to implementing the workforce reductions.
The case involves two groups of federal workers: those fired during the shutdown and those the administration attempted to fire after the government reopened. The ruling requires the reinstatement of affected employees at the State Department, the Defense Department, the General Services Administration, and the Small Business Administration. Hundreds of employees were terminated during the shutdown itself, while more than 4,100 layoff notices were issued across at least seven agencies as part of the ongoing reduction efforts.
Earlier in the proceedings, layoff notices started going out on Friday as the administration moved forward with its workforce reduction plans. On Oct. 15, Illston issued a temporary restraining order to halt the job cuts until a full hearing could be held.
The shutdown began on Oct. 1, and the unions filed their initial lawsuit in response to an Office of Management and Budget memorandum about allowing reductions in force during the government shutdown. Russell Vought, who heads the Office of Management and Budget, had issued guidance that the unions argued violated congressional intent.
During Wednesday’s hearing, Danielle Leonard, an attorney for the plaintiff unions, argued that Congress had been clear about the public interest in stopping the firings and reinstating affected workers. Leonard said Congress explicitly addressed what should happen to the hundreds of employees who were fired during the shutdown.
Brad Rosenberg, an attorney for the Justice Department, countered that the law did not cover ongoing Trump administration efforts to implement reductions in force that predated the government shutdown but were carried out during the current continuing resolution. Rosenberg argued that the word “otherwise” in the law meant it only covered the notices of new reductions in force, not the act of actually separating employees from government service if the process had already started.
When Rosenberg said it would be a “heavy lift” for agencies to rehire employees fired during the shutdown, Illston responded sharply, saying they should have been working on this since the statute was passed.
Rosenberg also argued that Illston’s final order shouldn’t restrict the actions of the Office of Management and Budget or the Office of Personnel Management, which issued memorandums on the legality of continuing reductions in force under the continuing resolution.
The ruling represents a significant setback for Donald Trump’s efforts to reshape the federal workforce. The administration had used the shutdown as an opportunity to accelerate job cuts, targeting programs across multiple agencies.
Illston indicated she might include a delay in her order to allow the government time to appeal. The ruling requires immediate action to reverse the firings and prevent additional layoffs through the end of January, when the current spending authorization expires.
This case has drawn attention to the tension between executive branch authority over workforce management and congressional power over federal spending and operations. The short-term spending law represented an unusual level of congressional intervention in personnel decisions, with lawmakers explicitly directing the reversal of firings that had already occurred.
The Supreme Court had previously allowed firings to proceed in an earlier phase of the litigation. Still, the legal landscape changed significantly when Congress passed the November spending bill, which included explicit workforce protections. The new statutory language left less room for judicial discretion, requiring courts to enforce the congressional mandate regardless of executive branch preferences.
The ruling affects workers across multiple federal agencies who faced job losses during the prolonged shutdown. Many of these employees experienced disruptions to their paychecks, health care coverage, and, in some cases, overseas postings for foreign service workers.
Court filings indicate that both categories of affected federal workers include several hundred employees each, with the potential for thousands more to be impacted depending on how broadly the administration’s workforce reduction plans extend across the government.
The case will likely continue as the Justice Department considers its next steps, including potential appeals. The current injunction remains in effect through Jan. 30, when the short-term spending law expires and Congress must again address government funding.
