Appeals panel partially lifts order that let CFPB layoffs inch forward

A federal appeals court panel on Monday blocked the Trump administration from moving forward with mass layoffs at the Consumer Financial Protection Bureau (CFPB), partially lifting a previous order construed as greenlighting the major cuts.  

The panel on the U.S. Court of Appeals for the District of Columbia Circuit revoked their order allowing the administration to conduct reductions-in-force of employees if a “particularized assessment” determined their roles were unnecessary for the agency to perform its statutorily required duties. 

The Trump administration took that previous order to mean that it could move to lay off roughly 90 percent of CFPB’s staff, but a lower judge stepped in before the reduction occurred.

“Given these ongoing disputes, we think it best to restore the interim protection of paragraph (3) of the preliminary injunction, which ensures that plaintiffs can receive meaningful final relief should the defendants not prevail in this appeal, rather than continue collateral litigation over the meaning and reviewability of the ‘particularized assessment’ requirement imposed by this court’s stay order,” the panel wrote in an unsigned order. 

Administration officials are set to appear before U.S. District Judge Amy Berman Jackson this week, as she considers whether the reduction-in-force violated her earlier order enjoining the administration from dismantling the agency. 

The Trump administration was preparing to lay off more than 1,400 employees and revoke their computer access on April 18 before Jackson stepped in.  

Officials contended that they were following the “particularized assessment” procedure laid out by the appeals court. The reduction would leave the CFPB with about 200 employees.  

In the unsigned order, the judges newly defined “particularized assessment” as involving a determination that each division or office within CFPB can still perform its duties required by law without the employees being laid off. The determination must be made by the decision-maker responsible for the RIF.  

Despite that, they agreed to let the portion of Jackson’s injunction barring any major staff reductions to remain in effect while the appeal moves forward.  

Judge Neomi Rao, an appointee of President Trump, wrote in a dissenting opinion that the panel’s decision barred leadership of the CFPB from abiding by Trump’s directive to cut back the agency. 

“The district court overstepped our stay,” she wrote. “Rather than remedy the judicial error, today’s order hamstrings the Executive and prevents the CFPB from downsizing until the merits of the appeal are resolved.” 

The judges wrote in the order that they already accommodated the government’s position by expediting its appeal, which is scheduled for oral arguments on May 16. There they will consider whether Jackson’s sweeping injunction stepped on the executive – but not before, they said.  

The National Treasury Employees Union sued the administration in February, when acting CFPB Director Russell Vought took charge and ordered employees to halt all work. Jackson granted the union a preliminary injunction after the administration initially attempted to conduct mass layoffs.