Trump’s ‘deferred Resignation’ Offer For Federal Workers Remains In Limbo

BOSTON — More than 2 million federal workers will have to keep waiting for clarity over President Donald Trump’s controversial “deferred resignation” plan after a federal judge heard arguments Monday about the program’s legality without issuing an immediate ruling about its future.

During an hour-long hearing, U.S. District Judge George O’Toole gave few hints about his views on the program, which purports to allow federal workers to resign immediately but remain on the federal payroll through September.

Last week, O’Toole ordered a temporary pause that effectively extended the deadline for employees to take up the offer, which is being spearheaded by Elon Musk and his Department of Government Efficiency. At the end of Monday’s hearing, the judge — an appointee of President Bill Clinton — made clear that the pause remains in effect while he mulls the legal arguments in the case.

O’Toole did ask at one point whether extending the deadline further might exacerbate its negative effects on the unions suing over it, since the number of employees opting in will likely increase.

A lawyer for the unions, Elena Goldstein, told O’Toole that the program lacks any legal authorization and misleads employees by promising their salaries are guaranteed through September, although congressionally approved funding for the federal government runs only through March 14.

“They’re making up their own law,” said Goldstein of Democracy Forward, a liberal legal-advocacy group. “When the government wants to downsize, there are ways to do this right. … None of that happened here.”

Justice Department attorney Eric Hamilton said Congress has given executive branch officials “substantial discretion” to set in-office and remote work policies — a flexibility he suggested extends to offering employees the opportunity to remain on the federal payroll for months without doing any work.

While Goldstein called the program an “ultimatum,” Hamilton said it was “humane” because it effectively allowed federal workers the ability to opt out of Trump’s return-to-office plans without losing their salaries.

“The voluntary resignation program offers a humane off-ramp to federal government employees,” Hamilton said.

Hamilton called the unions’ arguments “legally incoherent,” in part because while their lawsuit seeks to have the program declared illegal, their request for emergency relief actually seeks to prolong it by preventing the government from enforcing the deadline to accept the offer. That deadline was originally Feb. 6 but has been extended by O’Toole’s pause.

The Justice Department lawyer also said the Office of Personnel Management “has always expected that most of the uptake” for the offer would come in the last 24 to 48 hours before it closes. “Holding the program open in time into the future would only inject more uncertainty,” said Hamilton, a former Nebraska solicitor general who just last week argued, unsuccessfully, for the Trump administration in a major challenge to Trump’s bid to end birthright citizenship..

Goldstein said the program would harm federal workers whether they accept the deferred resignation or not. Workers who accept the offer might not receive the salary they were promised, while workers who decline the offer may find themselves saddled with extra work or targeted for layoffs.

“For employees who do nothing, they’re priorities for those [reductions in force.] They are priorities for those layoffs,” she said.

The offer was sent by email to more than 2 million federal employees on Jan. 28, including members of groups clearly ineligible for it, such as federal judges and contractors. The message said that if the employees agreed to resign by Feb. 6 they could stay on the federal payroll until Sept. 30 and be placed on administrative leave during that time, doing no work.

The deferred-resignation offer bore the same “Fork in the Road” subject line that Musk used in a similar message seeking to downsize the Twitter workforce after buying the company in 2022.

The offer was met with considerable confusion in the federal workforce, with some employees offering to resign and then being told they are not eligible for the offer.

Musk later linked to a “clarification” of the initial offer, saying some who take the offer might be required to work “in rare circumstances.” He assured employees that during the “deferred resignation” period they could do “whatever you like, including obtaining a new job.”

Four labor union organizations filed suit over the resignation offer last week, arguing that the offer and related guidance released by OPM misstated rules applicable to federal employees, misled them about whether they could legally obtain outside employment during the leave period and is broadly illegal because it lacks clear congressional authorization.

The White House said last week that 40,000 federal employees have offered to resign under the program.