Are Shutdown RIFs Legal? What the TRO Hearing Means for Federal Employees

For the first time in modern memory, federal agencies have begun issuing reduction-in-force (RIF) notices while the government is shut down. More than 4,000 employees—across agencies like HHS, Education, and EPA—received layoff notices last week, some of which were later rescinded after “coding errors.” Now, two major unions—AFGE and AFSCME—are suing the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) to stop the practice, arguing it violates long-established law.

The Legal Theory Behind the Lawsuit

In plain terms, the unions say shutdowns and RIFs are legally incompatible. Under the Antideficiency Act, agencies must halt most work during a funding lapse unless it’s “excepted”—meaning essential to protect life or property or necessary for the orderly suspension of operations. Historically, that’s meant no hiring, firing, or restructuring. Employees are either excepted (working without pay until funding returns) or furloughed (barred from working)—but neither group can be processed for permanent separation.

OMB’s new “lapse memo,” followed by OPM’s guidance, told agencies they could treat RIF-related work—planning, processing, even issuing notices—as “excepted.” That’s what the lawsuit challenges. The unions argue this directive is ultra vires (beyond OMB and OPM’s authority), arbitrary and capricious under the Administrative Procedure Act, and in conflict with both appropriations law and decades of OPM’s own shutdown guidance.

What the TRO Hearing Will Decide

A temporary restraining order (TRO) hearing is set for October 15 at 10:30 a.m. in San Francisco before the same judge who previously halted RIF-related actions earlier this year. The unions want the court to:

• Freeze all RIF-related activities during the shutdown;

• Require the government to disclose what notices have gone out and what notice periods are being used; and

• Prevent agencies from using the shutdown to convert temporary furloughs into permanent separations.

The court has already ordered the government to provide supplemental information on which agencies have issued RIFs and how those notices were structured.

What This Means If You Received a RIF Notice

A RIF notice usually starts a 30- or 60-day clock before a separation or downgrade takes effect. During that period, employees may have rights to bump, retreat, or be reassigned depending on tenure, performance, and veterans’ status. But if the unions are right—and RIFs issued during a funding lapse are unlawful—then those notices could be invalidated.

There’s also a financial wrinkle. If an employee is RIFed during a shutdown and later reinstated, agencies could argue the person isn’t owed shutdown back pay for the period after the RIF date. That’s one reason the unions are pressing for immediate relief—to preserve pay and retention rights while the court reviews the case.

How to Protect Yourself Right Now

If you’ve received a RIF notice or suspect one is coming:

• Monitor your email and mail closely. Notices are often time-sensitive.

• Document every communication about reassignments, furloughs, or RIFs.

• Consult your union or counsel to clarify your retention rights and appeal deadlines.

This case is moving quickly, and outcomes could shift within days.

Legal Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal advice. While I am a federal employment attorney, this post does not create an attorney-client relationship. Every situation is unique, and legal outcomes depend on specific facts and circumstances.