Appeals court gives Trump go-ahead to continue firing Consumer Financial Protection Bureau staff

The Trump administration recently scored a limited but significant win in its widely-telegraphed efforts to pare down, and perhaps ultimately shutter, the Consumer Financial Protection Bureau (CFPB).

In a terse, 3-page Friday ruling, the D.C. Circuit Court of Appeals stayed three parts of an eight-part preliminary injunction previously entered by U.S. District Judge Amy Berman Jackson on March 28.

In the underlying case, the National Treasury Employees Union (NTEU) alleges the Trump administration – specifically Office of Management and Budget Director Russ Vought – unlawfully fired CFPB employees without cause and scrubbed CFPB data from its records, including important CFPB contracts that are “necessary for cybersecurity.”

In a preview of her injunction, Jackson told U.S. Department of Justice lawyers she was inclined to grant the plaintiffs their requested relief to “make sure [the CFPB] hasn’t been choked out of its very existence” before she can issue a judgment on the merits.

The first provision of the injunction barred the government from destroying certain records; the second provision ordered the reinstatement of all probationary and term employees terminated since the government began its broad campaign of shrinking the federal workforce; the third provision ordered the government not to terminate any further employees – except for cause; the fourth provision barred a broadly worded work-stoppage order.

The fifth provision mandated the government to provide CFPB employees either office space of permission to work remotely plus a laptop computer “enabled to connect securely to the agency server” so they can perform their work; the sixth provision ordered the government to maintain a public-facing phone number and website and repository of complaints; the sixth provision ordered the government to rescind all notices of contract termination and barred any further cancellations; the eighth provision ordered the government to complete a compliance report and submit it by April 4.

On Friday, provisions two, three, and eight were stayed.

The three-judge panel clarified two of those stays.

“Provision two (2) is stayed insofar as it requires defendants to reinstate employees whom defendants have determined, after an individualized assessment, to be unnecessary to the performance of defendants’ statutory duties,” the court wrote. “Provision three (3) is stayed insofar as it prohibits defendants from terminating or issuing a notice of reduction in force to employees whom defendants have determined, after a particularized assessment, to be unnecessary to the performance of defendants’ statutory duties.”

In other words, the government does not need to re-hire any workers who are deemed unnecessary to the CFPB’s statutory mission and can continue firing even more employees deemed “unnecessary.”

The appellate court also clarified – but chose not to stay – the fourth provision of the injunction. The panel said they understood the lower court’s order to be limited enough to allow for stoppages the government determines will help root out “unnecessary” work.

The rest of Jackson’s injunction is explicitly undisturbed.

“All other provisions of the preliminary injunction remain in full effect pending further order of the court,” the panel ruled.

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