Judges Rule That Cfpb, Hud Probationary Employees Still Have Jobs — For Now

In separate rulings this week, federal judges in Maryland and California told the Trump administration that it must reinstate thousands of probationary employees who were let go without advance notice or cause. These include many at the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Housing and Urban Development (HUD).

“When the federal government terminates large numbers of its employees, including those
still on probation because they were recently hired or promoted, it must follow certain rules,” Judge James K. Bredar wrote in a ruling issued Thursday in the U.S. District Court for the District of Maryland.

“In this case, the government conducted massive layoffs, but it gave no advance notice. It
claims it wasn’t required to because, it says, it dismissed each one of these thousands of
probationary employees for “performance” or other individualized reasons. On the record before the Court, this isn’t true. There were no individualized assessments of employees. They were all just fired. Collectively.”

The case involves 21 federal agencies, including the CFPB and HUD. Bredar determined that the government’s actions are actually reductions in force (RIFs) that require notice to the states that will be impacted.

The judge issued a temporary restraining order that “restores the status quo” for affected employees and will hold another hearing on March 26 to decide whether a longer pause is warranted.

The Hill reported that the Trump administration plans to challenge the ruling.

“The President has the authority to exercise the power of the entire executive branch — singular district court judges cannot abuse the power of the entire judiciary to thwart the President’s agenda,” White House press secretary Karoline Leavitt told the outlet.

In a similar case filed in the U.S. District Court for the Northern District of California, Judge William Alsup ruled Thursday that employees at six federal agencies must have their jobs restored, at least temporarily. The impacted agencies include the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Agriculture (USDA), which run critical loan programs for the housing and mortgage industries.

Alsup made similar remarks to Bredar in ruling that the government attempted to circumvent RIF mandates by tying the layoffs to employee performance issues.

“It is a sad, sad day when our government would fire some good employee and say it was based on performance when they know good and well that’s a lie,” Alsup said, according to a report from Politico.

But Alsup’s ruling also included clear guidance that agencies can make cuts to their workforce if they follow proper protocol. This can be done through the Office of Personnel Management (OPM), which had previously implemented a deadline of March 13 for departments to submit their reduction-in-force plans.

“The words that I give you today should not be taken that some wild-and-crazy judge in San Francisco said that an administration cannot engage in a reduction in force,” Alsup said. “It can be done, if it’s done in accordance with the law.”

The CFPB and HUD are just some of many agencies roiled by the Trump administration’s actions to slash federal spending through cuts to programs and personnel.

Although the CFPB can only be eliminated by an act of Congress, its future remains uncertain under the leadership of acting director Russell Vought. The administration has said its nomination of Jonathan McKernan to serve as the next full-time director is a clear indication that the bureau will continue, albeit with a smaller footprint.

HUD Secretary Scott Turner has also moved to transform his department. This included the elimination of the Affirmatively Furthering Fair Housing (AFFH) rule that was a staple of the Biden administration’s efforts to stop segregation and discrimination.