Supreme Court Stays Injunction Halting RIF and Reorganization Plans
In a brief but consequential opinion issued July 8, 2025, the Supreme Court lifted a lower court’s injunction that had blocked the Trump administration’s sweeping plans to restructure the federal government. The decision in Trump v. American Federation of Government Employees (AFGE) marks a significant legal victory for the administration, allowing it to proceed with large-scale reductions in force (RIFs) and agency reorganizations across the executive branch.
Background of the Case
The dispute began in early 2025 when President Trump signed an executive order directing federal agencies to prepare for mass layoffs and structural overhauls. The EO aimed to streamline government operations, reduce bureaucracy, and eliminate what the administration described as “inefficiencies” in federal staffing.
A coalition of labor unions, nonprofit organizations, and local governments—including AFGE, AFSCME, and the cities of Chicago and Baltimore—filed a lawsuit in the Northern District of California. They argued that the president’s actions violated the separation of powers by bypassing Congress, which had created and funded the affected agencies. Judge Susan Illston agreed, issuing a preliminary injunction in May that halted the administration’s plans.
Supreme Court’s Decision
The Supreme Court’s unsigned order did not rule on the legality of any specific agency reorganization or RIF plan. Instead, it focused narrowly on whether the executive order and accompanying Office of Management and Budget (OMB) memorandum could be implemented while litigation continues. The Court concluded that the government is likely to succeed on its argument that these directives are lawful, and therefore lifted the injunction.
The position of the Supreme Court can be summarized with this quote from the decision:
The District Court’s injunction was based on its view that Executive Order No. 14210, 90 Fed. Reg. 9669 (2025), and a joint memorandum from the Office of Management and Budget and Office of Personnel Management implementing that Executive Order are unlawful. Because the Government is likely to succeed on its argument that the Executive Order and Memorandum are lawful—and because the other factors bearing on whether to grant a stay are satisfied—we grant the application.
Justice Ketanji Brown Jackson dissented, warning that the decision “releases the President’s wrecking ball at the outset of this litigation” and risks irreversible damage to federal institutions.
The administration can now move forward with plans to overhaul 21 federal departments and agencies, including the Departments of Commerce, Health and Human Services, Treasury, and State.
Plaintiffs’ Response
The coalition that brought the case expressed disappointment about the Court’s decision in a statement and vowed to continue litigating the case going forward:
Today’s decision has dealt a serious blow to our democracy and puts services that the American people rely on in grave jeopardy. This decision does not change the simple and clear fact that reorganizing government functions and laying off federal workers en masse haphazardly without any congressional approval is not allowed by our Constitution. While we are disappointed in this decision, we will continue to fight on behalf of the communities we represent and argue this case to protect critical public services that we rely on to stay safe and healthy.
What Happens Next?
The case continues to unfold, but for now, the Trump administration has secured a pivotal legal foothold in its effort to reshape the federal government and reduce the size of the federal workforce.
As noted in earlier FedSmith articles such as this one, those filing the initial lawsuits are going into courts in districts throughout the country where they are more likely to receive a favorable decision. While that may provide a favorable start for their case, it does not determine the final outcome as recent cases have demonstrated.
As noted above, there is a strong indication that the Supreme Court will view the executive order on Government Efficiency and Workforce Optimization as being able to proceed. At least for now, the initial stay has been lifted.
Further appeals are likely, and the case may even end up back in the Supreme Court for a final decision. That process could easily take a few months. While we do not know what actions, if any, will be taken by the administration in the interim, one likely possibility is that agencies will proceed to implement reorganizations and reductions in force now that the initial stay has been lifted.
This will likely impact many federal employees, who may find themselves in different jobs with new responsibilities or being without a federal government job as the process unfolds.
While the ultimate impact of the Executive Order is yet to unfold, agency heads have previously been directed to undertake preparations to initiate large-scale RIFs. The priority for RIFs would be in organizations the administration suspends or closes, and employees in functions not mandated by statute or law who are not typically designated as essential during a lapse in appropriations.
The Fact Sheet accompanying the Executive Order references the “unnecessary footprint” of government. It states:
- There are too many federal employees.
- Excluding active-duty military and Postal Service employees, the federal workforce exceeds 2.4 million.
- No one knows exactly how many federal agencies exist, but the Federal Register lists over 400.
- The federal workforce contributes significantly to federal spending and debt.
- In fiscal year 2022, the federal government spent nearly $300 billion on compensation for civilian employees, excluding pensions.
- According to a recent congressional report, only 6% of federal workers report to work in-person on a full-time basis.
Dissension Among Supreme Court Justices
In a recent court decision highlighted in this article, one law professor wrote:
The opinion seemed to fan the flames of “democracy is dying” claims of protesters, suggesting that basic limits on injunctive relief could result in the collapse of our core institutions. It was a hyperventilated opinion better suited to a cable program than a Court opinion. The response from Justice Amy Coney Barrett was a virtual pile driver of a rebuke. What was notable is that a majority of the justices signed off on the takedown. It could indicate a certain exasperation with histrionics coming from the left of the Court in recent years.
The hyperbole among the justices has continued with this recent release from the Court. In her dissent, the newest Supreme Court Justice Katanji Brown Jackson wrote, apparently in agreement with the plaintiffs in the case:
[F]rom its lofty perch far from the facts or the evidence, this Court lacks the capacity to fully evaluate, much less responsibly override, reasoned lower court factfinding about what this challenged executive action actually entails. I respectfully dissent because, in addition to the Government’s failure to show the exigency or irreparable harm that is required for emergency relief, this Court could not possibly know in this posture whether the Government is likely to succeed on the merits with respect to such a fact-dependent dispute.
No doubt, this will attract more attention and probably create more tension. We can anticipate further analysis from legal experts, a continuation of this less-restrained dialogue in future Supreme Court decisions, and even more Supreme Court decisions on executive orders and actions taken by President Trump as the administration implements policies designed to reduce the federal government’s impact on the American public.
