On March 25 we posted The IRS ‘Reinstated’ 7,000 Workers, But They Are Not Returning To Work? discussing that the federal government will pay about 7,000 IRS probationary employees, who were laid off less than a month ago, not to work while lawsuits over layoffs wind their way through the court system. The email sent to probationary workers also advised them “not [to] report to duty or perform any work until receiving further guidance.”
Now The Supreme Court issued a stay on April 8, 2025, halting a lower court's preliminary injunction that required federal agencies to reinstate terminated probationary employees and barred the Office of Personnel Management (OPM) from issuing workforce reduction guidance. The injunction, issued by U.S. District Judge William H. Alsup on March 13, was challenged by OPM in a case involving labor unions and nonprofit organizations. The stay will remain in effect pending the outcome of the appeal in the 9th Circuit or a Supreme Court review, if certiorari is granted.
"The District Court's Injunction Was Based Solely On The Allegations Of The Nine Non-Profit-Organization Plaintiffs
In This Case," The Court Explained. "But Under Established Law, Those Allegations Are Presently Insufficient
To Support The Organizations' Standing."
In its order, the Supreme Court stated that the district court's injunction relied solely on allegations from nine nonprofit plaintiffs, which it deemed insufficient to establish standing under established legal standards. The Court explained that the plaintiffs must identify specific members harmed or demonstrate that their entire membership suffered a concrete injury to meet Article III requirements.
At an April 9 hearing, Judge Alsup questioned whether reinstated employees could be terminated again and how long they would remain protected under the injunction. He also asked whether their employment could still be linked to OPM’s allegedly unlawful February directive. The government argued that the nonprofits had failed to provide evidence of direct harm to their members.
The judge criticized both parties for delays in providing a list of affected employees and expressed little interest in assigning blame. He emphasized the need for compliance with procedural requirements under the Administrative Procedure Act.
Alsup gave both sides until 5 p.m. Friday to submit the list of terminated employees, which is critical to determining whether the plaintiffs have standing and whether further relief is warranted. The case remains under review as the appellate process continues.
Meanwhile, other job losses loom at the IRS. The Trump administration wants to cut the IRS workforce by 20% by May 15, including those who have already left or were fired.
Officials at the Elon Musk-led group advising the administration want Acting IRS Commissioner to eliminate 18,141 jobs across the agency. This includes the roughly 12,000 employees terminated as part of new-hire layoffs.
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