This case is moving in so many different directions simultaneously that it is very hard to follow. But on the day before a District Court judge was scheduled to convene a hearing on whether a plan from the Consumer Financial Protection Bureau to try and fire as many 1,500 employees was lawful or not, a panel from the Court of Appeals for the District of Columbia temporarily blocked the Trump administration’s plans to proceed with those layoffs. The court’s decision comes after a previous ruling from the Appeals Court that had allowed for reductions in force (RIF) if an individualized assessment determined the employees’ roles were unnecessary for the agency’s statutory duties.
Yesterday’s ruling is the second one ordering a halt to the planned layoffs, which would have reduced the agency’s staff by approximately 90%. The appeals court clarified that any such layoffs must be based on a determination that each division or office within the CFPB can still fulfill its legal duties without the affected employees. The court also reinstated the job protections from a previous injunction issued by District Court judge Judge Amy Berman Jackson.
The decision has temporarily restored a pause on mass firings, requiring the administration to present more detailed assessments of the employees’ roles within the agency. The appeal will continue, with oral arguments scheduled for May 16.
Judge Neomi Rao, a Trump appointee, dissented from the ruling, arguing that the decision interfered with the executive branch’s ability to downsize the agency. She contended that the district court’s decision overstepped the appeal court’s initial stay and hampered the administration’s efforts to implement its restructuring plans.
This legal battle appears to be for the future of the CFPB. The National Treasury Employees Union, which represents CFPB employees, has challenged the Trump administration’s moves to dismantle the agency, alleging that the RIF violates legal protections for federal workers.
As the case moves forward, more hearings are set, and the final decision will determine the future structure and scope of the CFPB.
