A federal appeals panel on Friday halted parts of a district court judge’s injunction blocking the Trump administration’s effort to dismantle the Consumer Financial Protection Bureau, allowing officials to move ahead with firing some agency employees.
Russell T. Vought, the White House budget office director, was named the consumer bureau’s acting director in February and immediately began gutting the agency. He closed its headquarters and sought to terminate its lease, canceled contracts essential to the bureau’s operations, terminated hundreds of employees and sought to lay off nearly all of the rest.
In a lawsuit brought by the bureau’s staff union and other parties, Judge Amy Berman Jackson of the Federal District Court in Washington froze those actions last month with an injunction to stop what she described as the administration’s “hurried effort to dismantle and disable the agency entirely.” The Justice Department appealed her ruling.
A three-judge panel from the U.S. Court of Appeals for the District of Columbia Circuit unanimously rejected the government’s request to strike down Judge Jackson’s injunction, but it stayed parts of her ruling while the government’s appeal progresses. Specifically, the appeals court said the agency’s leaders can send a “reduction in force” notice — the process through which the government conducts layoffs — to employees they have determined are not necessary to carry out the agency’s “statutory duties.”
When Congress created the consumer bureau in 2011, it assigned the watchdog agency dozens of tasks and ordered it to staff certain positions, including offices to aid student loan borrowers, military service members and older Americans. Those mandated obligations have been at the heart of the legal fight over the agency, because the bureau is required to fulfill those duties unless Congress acts.
Mr. Vought’s team fired more than 200 probationary and fixed-term employees, only to reinstate most of them, with back pay, on Judge Jackson’s orders. The appeals court cleared the way for some to be fired again. Agency leaders may terminate employees after “an individualized assessment” of their necessity for carrying out the agency’s statutory tasks, the ruling said.
But the court left much of Judge Jackson’s order intact, including her mandates that agency leaders shall not delete or destroy most of the bureau’s records and data, and that employees must be given access to either physical office space or the tools needed to work remotely. The consumer bureau’s Washington headquarters has remained shuttered and off limits to workers since Mr. Vought’s arrival.
The appeals court expedited the government’s appeal and scheduled oral arguments for May 16.