A Judge Blocks Trump’s Shutdown Cuts and Invites a Constitutional Showdown
A federal judge has temporarily blocked the Trump administration from proceeding with mass layoffs of federal employees during the government shutdown, calling the move “unprecedented” and “the epitome of hasty, arbitrary, and capricious decisionmaking.”
Judge Susan Illston, a Clinton appointee in the Northern District of California, issued a temporary restraining order on Wednesday that halts all reduction-in-force (RIF) notices issued since October 10 and bars agencies from implementing or even counting down their effective dates. The injunction applies across more than two dozen departments and agencies, from Treasury and Health and Human Services to Education and Commerce.
Illston ordered the administration to provide a full accounting of all layoffs by Friday and set a preliminary-injunction hearing for October 28. She required the unions to post only a $10 bond and rejected the Justice Department’s request for a stay.
Converting the APA into a Labor Law
Illston based her ruling on the Administrative Procedure Act (APA), treating the Office of Management and Budget (OMB) “Lapse Memorandum”—which encouraged agencies to “use this opportunity” to restructure programs “not consistent with the President’s priorities”—as a “final agency action” subject to judicial review.
That is a remarkable stretch. The APA governs how agencies make rules and enforce laws that affect the public, not how the executive manages its own employees. Personnel decisions and internal directives have always been excluded under the law. By redefining a management memo as rulemaking, Illston blurred the line between regulation and governance, turning the president’s staffing decisions into litigable events.
Her own language makes the leap clear. “RIFs during a government shutdown are not ‘ordinary’ RIFs in any sense of the word,” she wrote. “OMB’s memorandum essentially seeks to overturn mandates that Congress has put in place.” She added that the administration’s actions showed “the epitome of hasty, arbitrary, and capricious decisionmaking,” pointing to episodes where “human resources staff were told to issue RIF notices to themselves.”
Illston scolded the Justice Department for declining to defend the policy’s legality during oral arguments. “Defendants were ‘not prepared’ to address the merits today,” she noted. But that refusal underscores the weakness of her own reasoning. A court cannot create jurisdiction simply because the government declines to debate policy mid-shutdown.
The order’s reliance on the APA is almost certain to collapse on appeal. The Supreme Court has repeatedly held that internal executive decisions are not subject to APA review. By treating a shutdown management directive as a “final agency action,” Illston rewrote the statute to reach where Congress deliberately refused to tread. If upheld, her approach would make nearly any executive reorganization—even inter-office transfers—subject to judicial second-guessing. That’s unlikely to be welcomed by a Supreme Court that has repeatedly stressed that judges should respect the separation of powers and not infringe on the executive branch’s management of its affairs.
Congressional Control of Spending Means Layoffs Are Required
But the underlying issue here isn’t labor law or the APA. It’s the Constitution.
When Congress refuses to fund the government, is the executive allowed to keep employees on the books in defiance of the Appropriations Clause? Or does the Constitution require layoffs of federal workers whose employment Congress has decided not to fund?
That question has haunted every shutdown for decades.
During the 2018-2019 shutdown, federal workers sued over being forced to work without pay, arguing it violated the 13th Amendment’s prohibition on involuntary servitude and the Fair Labor Standards Act’s minimum wage requirements. In Martin v. United States and related cases, Judge Richard Leon briefly ruled that “excepted” employees had to be paid on time even during shutdowns, but his order was immediately stayed. When the shutdown ended and workers received back pay, the cases became moot. The appellate courts never reached the merits.
This pattern repeats with every shutdown: litigation begins, courts issue preliminary rulings or punt on procedural grounds, Congress reopens the government, and the constitutional questions evaporate. The fundamental tension between the Antideficiency Act (which bars spending without appropriations) and the practice of keeping workers employed (which creates obligations without funding) remains unresolved.
The central problem is that the federal shutdown system has long run on a legal fiction. The government claims it can keep “essential” employees working without pay on the theory that it’s not spending money. But since everyone knows the workers will eventually be paid, this is quite obviously a thinly disguised way to get around Congressional control of spending.
What’s more, even this shaky logic collapses once you read Article I, Sections 8 and 9 together. Congress alone has the power both to borrow on the credit of the United States and to appropriate money from the Treasury. If incurring obligations without an appropriation creates a future claim on the Treasury, the executive has effectively borrowed money without congressional approval. That’s something the Constitution prohibits.
No appropriation means no spending—and no running up a tab with workers still on the payroll.
Think about it this way. If Congress decided not to provide any funds for Immigration and Customs Enforcement (ICE), could the administration keep running the agency and employing agents on the theory that someday Congress will restore the funding? Of course not. The executive branch has to operate on the budget Congress passes rather than the budget it expects.
Right now, Congress has decided not to fund the federal government. Lawmakers of both parties have been very open about this. It is not an accident or a momentary lapse. It is a standoff in which Congress, in its legislative wisdom, has decided not to fund further expenditures.
Illston’s Contradiction
Illston’s temporary restraining order, while framed as a narrow labor victory, effectively confirms the underlying constitutional paradox. She held that the administration cannot order employees to work to process layoffs because doing so would violate the Antideficiency Act—the same statute that prohibits agencies from operating without appropriations. In other words, she said that working to lay off workers is barred during the shutdown.
That logic applies equally to any activity during a shutdown, not just layoffs. If carrying out RIFs is unlawful because it requires work during a funding lapse, how can running the rest of the government be lawful under the same circumstances?
In that sense, Illston’s order may be the prelude to the ruling that finally forces courts to confront the real question: what, if anything, can the executive branch lawfully do when Congress hasn’t appropriated funds?
The administration’s lawyers will almost certainly appeal. The Supreme Court has already signaled reluctance to let lower courts freeze executive actions tied to shutdowns. But even if Illston’s order is overturned, her reasoning points directly to the contradiction at the heart of every modern funding lapse: the government cannot constitutionally incur obligations without an appropriation, yet it routinely does so by keeping “essential” functions running.
Shutdown Theater Meets Constitutional Reality
President Trump has made no secret of his desire to use the shutdown to permanently slim down the federal bureaucracy. OMB Director Russell Vought said Wednesday that the administration plans to expand layoffs to more than 10,000 employees, calling the shutdown “an opportunity to stay on offense for the American taxpayer.”
Vice President JD Vance added that “the deeper the cuts, the longer the shutdown continues.”
Illston’s injunction may delay that agenda. But it also exposes how fragile the current shutdown system really is. Every administration, Democrat and Republican alike, has operated on the assumption that it can stretch the Constitution’s fiscal clauses to keep the lights on. By pushing the boundaries farther than anyone before, Trump’s team may finally force the courts to say where those boundaries lie.
Sometimes the Constitution reasserts itself not through caution, but through confrontation. Illston’s ruling is a setback for the administration in the short term. In the long term, it may be the case that ends the shutdown charade altogether—and proves that when Congress fails to fund the government, the real constitutional command is simple: stop everything until it does.
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