The Trump administration has reached a settlement with federal unions in a lawsuit over agency reductions in force (RIFs) conducted around the 2025 government shutdown.

The settlement agreement, announced Friday, halts the current litigation and renders all guidance and directives related to the shutdown RIFs officially rescinded.

Under the settlement, the Trump administration agreed to inform agencies that all remaining shutdown-related RIF plans have been abandoned.

Agencies have 30 days to remove any remaining references to the Trump administration’s shutdown RIF guidance from their websites and from their shutdown contingency plans.

If agencies plan to revise shutdown-related RIF plans in the future, they will be required to provide 30 days’ advance notice to federal unions, the agreement states.

“Today, working people won,” American Federation of Government Employees National President Everett Kelley said Friday. “The administration tried to turn a shutdown into an excuse to fire the public servants who kept this country running without a paycheck on payday, and we refused to let it stand. We fought back, we held the line and they backed down.”

Federal News Network reached out to both the Office of Management and Budget and the Department of Justice for comment.

The settlement this week comes after federal unions filed a lawsuit against the Trump administration on Sept. 30, 2025, challenging its threat of mass federal employee layoffs in the event of a shutdown.

The lawsuit contended that an OMB directive and subsequent agency RIF plans violated both the Antideficiency Act and the Administrative Procedure Act by unlawfully taking steps to lay off employees during a shutdown, using the shutdown as a reason for implementing a RIF, and requiring employees to conduct RIF-related work during the shutdown.

In the days leading up to last fall’s government shutdown, OMB told agencies to begin drafting mass firing plansahead of the anticipated funding lapse. Guidance from the Office of Personnel Management subsequently green-lit agencies to work on RIFs both leading up to and during the shutdown.

Several agencies pursued RIFs related to the 2025 shutdown, with approximately 4,000 federal employeesreceiving layoff notices.

“After inflicting intentional trauma and stress on the entire federal workforce during the longest government shutdown in the history of the United States, using it as a tactic to fire public servants was a new low for the Trump administration,” National Federation of Federal Employees National President Randy Erwin said Friday. “Not only was it absolutely shameful, but it was also highly illegal.”

“The administration tried to use a government shutdown to eliminate jobs, hollow out federal agencies, and make it harder for Americans to get the services they depend on,” National Treasury Employees Union National President Doreen Greenwald added. “This victory protects more than federal employees and their livelihoods. It protects a government that works for the people it serves.”

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