In a significant legal setback for President Donald Trump’s administration, a federal appeals court on Friday, May 30, 2025, declined to lift a lower court ruling that blocks the government’s planned mass layoffs and restructuring of federal agencies. The decision effectively stalls one of the administration’s most far-reaching attempts at downsizing the federal workforce and altering agency operations.
The San Francisco-based 9th U.S. Circuit Court of Appeals upheld an earlier ruling by U.S. District Judge Susan Illston, which prohibited large-scale terminations across approximately 20 federal agencies. The court’s decision prevents the Trump administration from proceeding with initiatives that would have resulted in tens of thousands of job losses and the closure of numerous federal offices and programs—unless Congress explicitly authorizes such actions.
Judge Illston issued her ruling on May 22, siding with a coalition of labor unions, nonprofit organizations, and municipal governments that argued the executive branch cannot unilaterally restructure federal agencies without legislative approval.
A three-judge panel of the 9th Circuit, in a 2-1 decision, rejected the administration’s request to stay Illston’s ruling while the matter proceeds through the appeals process, which may take several months. The administration is now expected to petition the U.S. Supreme Court for emergency intervention.
“The Trump administration will immediately fight back against this absurd order,” the White House said in a statement. “A single judge is attempting to unconstitutionally seize the power of hiring and firing from the Executive Branch.”
Supporters of the challenge welcomed the appellate court’s stance. “The Ninth Circuit’s decision today rightfully maintains the block on the Trump-Vance administration’s unlawful, disruptive, and destructive reorganization of the federal government,” the plaintiff coalition said.
The appeals court determined that the administration failed to demonstrate it would suffer irreparable harm if the layoffs remained suspended and found that the plaintiffs had a strong likelihood of success on the merits of their case.
“The executive order at issue here far exceeds the president’s supervisory powers under the Constitution,” wrote Judge William Fletcher in the majority opinion. He was joined by Judge Lucy Koh. Both judges were appointed by Democratic presidents—Bill Clinton and Joe Biden, respectively.
In dissent, Judge Consuelo Callahan, appointed by Republican President George W. Bush, contended that the administration had suffered serious harm from the injunction and was likely to succeed on appeal.
Contested Government Reforms
Judge Illston’s injunction represents the most sweeping judicial action against the administration’s proposed federal reorganization, which was heavily influenced by Elon Musk, a key Trump ally and the CEO of Tesla. Illston also barred the Department of Government Efficiency (DOGE) from issuing orders related to layoffs or structural changes across the federal bureaucracy.
The restructuring initiative has been met with widespread legal opposition. Various lawsuits have challenged DOGE’s activities on grounds ranging from labor law violations to overreach of executive authority. While some courts ordered the reinstatement of thousands of probationary federal employees dismissed in February, those rulings were later stayed on appeal.
On the same day the court delivered its ruling, Musk made a farewell appearance with Trump in the Oval Office, signaling the end of his formal involvement in the administration’s restructuring campaign.
Earlier in the year, Trump had directed all federal departments to collaborate with DOGE to identify cost-saving measures, including workforce reductions. The directive urged agencies to cut redundant roles, reduce management layers, shutter regional offices, replace routine tasks with automation, and curtail contractor use. Among the agencies impacted, health-related departments alone were slated to lose more than 10,000 employees.
The plaintiffs in the case argued that the scale and nature of the layoffs circumvent Congress’s constitutionally granted power to establish and fund federal agencies and determine their missions.
Judge Illston emphasized in her decision that if allowed to proceed, the layoffs would cause irreparable harm. She cited specific examples, including a U.S. Department of Labor office in Pittsburgh responsible for researching health risks among miners, which would retain only one employee out of its current staff of 222.
She also noted anticipated cuts to local offices of the Social Security Administration, the Farm Service Agency, and Head Start early education programs services relied upon by vulnerable communities across the country.
