A U.S. district judge has dissolved a temporary freeze on the Trump administration’s plan to offer millions of federal employees a payout in exchange for resigning from their positions, according to a court filing on Wednesday.
U.S. District Judge George O’Toole Jr. had initially paused the plan following a lawsuit filed on February 4 by labor unions representing government employees. The unions argued that the administration’s directive, which incentivized federal workers to resign by offering deferred compensation, was unlawful. However, in his ruling, O’Toole determined that the unions lacked legal standing to bring the suit, allowing the plan to move forward.
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“The plaintiffs here are not directly impacted by the directive,” the filing stated. “Instead, they allege that the directive subjects them to upstream effects including a diversion of resources to answer members’ questions about the directive, a potential loss of membership, and possible reputational harm.”
The Trump administration’s plan, outlined in a January 28 email from the U.S. Office of Personnel Management (OPM), offered federal employees deferred compensation through September 30 if they submitted resignation notices by February 6. The email also outlined the administration’s broader goals to reform the federal workforce, including requiring a return to in-person work, fostering a performance-driven culture, creating a “more streamlined and flexible workforce,” and enhancing standards of conduct.
“If you choose to remain in your current position, we thank you for your renewed focus on serving the American people to the best of your abilities,” the email stated. However, it also warned employees that their positions could be eliminated, adding that those affected would “be treated with dignity and will be afforded the protections in place for such positions.”
The plan has sparked significant controversy, with critics arguing that it undermines the stability of the federal workforce. An estimated 5-10% of federal employees are expected to resign under the plan, potentially saving the government $100 billion.
The Central Intelligence Agency (CIA) has also joined the effort, becoming the first intelligence agency to offer payouts to its workforce as part of the administration’s downsizing strategy.
The payout plan follows an executive order signed by President Trump on January 20, which requires federal agencies to end remote work and bring employees back to in-person work on a “full-time basis.”
Democrats and labor unions have vehemently opposed the administration’s actions. On Monday, the American Federation of Government Employees held a protest dubbed “Save the Civil Service,” where Democratic lawmakers expressed their outrage.
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As the plan moves forward, its impact on the federal workforce and the broader implications for government operations remain uncertain. Critics warn that the loss of experienced employees could disrupt critical services, while supporters argue that the reforms will create a more efficient and accountable federal workforce.
For now, the Trump administration’s controversial payout plan is back on track, leaving federal employees to weigh their options as the deadline for resignations approaches.
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