Court of Appeals Denies Request Halting Enforcement of Order Restricting Federal Unions
An order issued by the DC Circuit of Appeals is a significant loss for the National Treasury Employees Union (NTEU) and other unions. The legal challenge attempts to overturn an executive order issued by President Trump that eliminates union representation for most federal employees.
Although a final decision has not been made, the court order issued on July 16, 2025, denied the union’s request to rehear the decision to deny an injunction that would have prevented the implementation of the executive order.
The case is significant. The executive order expands the list of agencies excluding employees from union representation. It targets major agencies and would mean unions would no longer represent most federal employees.
According to the executive order, agencies would not be covered by the federal labor relations statute because they “are hereby determined to have as a primary function intelligence, counterintelligence, investigative, or national security work. It is also hereby determined that Chapter 71 of title 5, United States Code, cannot be applied to these agencies and agency subdivisions in a manner consistent with national security requirements and considerations.”
“It’s Going to Be Devastating” As Money Dries Up for Unions
As an indication of the impact of the executive order on federal employee unions, Everett Kelley, national president of the American Federation of Government Employees (AFGE), has said the union cut its staff and that the executive order removed over 200,000 of its dues-paying members. “It’s going to be devastating,” according to AFGE’s National President. This statement was made prior to the latest court decision denying an injunction on the implementation of the executive order.
Implications of the Latest Court Decision
The new decision from the Court of Appeals is not a final decision on the merits of the union’s argument. It does allow the administration to proceed with implementing the executive order. Here are the practical implications of this latest decision.
Agencies are halting agency withholding of union dues payments. This will put significant financial pressure on the unions. The Office of Personnel Management (OPM) previously advised agencies:
CBAs (collective bargaining agreements) contractually commit agencies to making such (dues) allotments according to specified procedures. When a covered agency terminates its CBAs, those contractual commitments no longer apply, and the covered agency should terminate allotments except where required by statute. Agency employees may make other arrangements for dues payments if they wish to do so. However, agency resources ordinarily should not be expended to facilitate payment of union dues.
As the goal of the executive order was to remove federal employee unions from most federal agencies, cutting off the unions’ source of funding will obviously enhance that objective, particularly when the cost of the lawsuits will be putting a strain on union resources.
From a financial standpoint, that may be the most significant result of the Court of Appeals denying the injunction against implementing the executive order.
The NTEU, representing approximately 160,000 federal employees, has reported it will be losing around $2 million every month in dues with agencies halting payroll deductions. The union says that it will lose more than half of its revenue and over two-thirds of its membership without these deductions, which would threaten its operational viability.
The Center for American Progress estimated that the executive order affected over one million federal employees. This is a significant portion of the government’s unionized employees, amplifying the financial impact of the order on these unions.
In addition, the Defense Finance and Accounting Service (DFAS), which manages payroll for several agencies, has also canceled deductions for supplementary union-provided benefits like vision and dental insurance, further impacting union finances. The lack of notice exacerbated the issue, as unions were unable to prepare alternative collection methods swiftly.
Legal Rationale for the Latest Court Decision
In addition to dues withholding for unions by agencies, the recent decision affirms the Executive Power of the President (at least temporarily):
- The denial of an en banc rehearing (a hearing before the full court instead of a panel of judges) leaves in place the decision that the executive order is within the president’s statutory discretion. This discretion allows excluding employees from coverage of the federal labor relations law if the employees are “engaged in intelligence, counterintelligence, investigative, or security work”.
- This ruling weakens the legal pathway for NTEU and other unions to block the executive order at this stage of the legal process. Although the case may still be appealed to the Supreme Court or further litigated on the merits, the executive order remains in effect.
- The statement from the Court of Appeals emphasizes that the parties in a case (including the government) must meet a stringent test for a stay pending appeal—specifically, showing clear “irreparable harm.”
The concurring statement from Judge J. Michelle Childs, who disagreed with the decision by the district court to reject an injunction of the Executive Order, included this statement that emphasizes the legal rationale for this case:
A special panel of this court granted the Government’s motion for a stay pending appeal.
As I detailed in my dissent to that special panel’s order, I continue to believe that the Government fell short of its burden to show its own irreparable harm absent a stay pending appeal. En banc reconsideration is rare, however, and this particular petition has not satisfied the high threshold for review by our full court. I write separately to underscore the burden our case law imposes on all parties seeking a stay, including the
Government.
Conclusion
As noted above, this case is not over. No decision has been issued on the merits of the union’s arguments presented in court.
The case is likely to eventually be heard by the US Supreme Court, which will take some time. Moreover, recent decisions from the Supreme Court on federal workforce issues have not been favorable to attempts to deny the administration’s ability to make changes in the structure of the federal government.
The most significant impact of the issue may be the financial damage to federal employee unions. While unions are not implementing alternative dues payment systems, using federal agency payroll systems for this purpose may be too late to limit the financial damage.
Federal employees may not enroll in the alternative dues withholding systems if they are concerned about job security or have already been terminated by their agency. With the stress on the workforce resulting from various initiatives to optimize (downsize) the federal government, the changes, and the more limited impact of unions on government workforce policies, may last longer than originally anticipated.
And, while it seems unlikely, the approach of federal employee unions actively and routinely supporting one political party over the other may force some soul-searching by unions. Is the approach of routinely supporting one political party good for their institution or for those they represent in the federal workforce?
While President Trump has taken a very aggressive approach to his administration’s dealings with federal employee unions, this approach is not a big surprise, given his policies during his first term as president.
Would this have changed if the unions had remained politically neutral during the years leading up to the election or if they had tried to work with the administration before Donald Trump took office? We will never know. But, to date, the approach of attacking and routinely seeking legal redress may not have worked out best for the unions or those they represent.
