Judge Maintains Hold on Trump’s Federal Employee Buyout Offer Amid Legal Battle

Lawsuit Claims Deferred Resignation Program Is an Unlawful Ultimatum for Federal Workers

A federal judge in Boston has decided to maintain a pause on the Trump administration's controversial deferred resignation buyout program, which aims to offer tens of thousands of federal employees financial incentives to voluntarily resign. U.S. District Judge George A. O'Toole Jr. announced Monday that he will keep the program on hold until he issues a ruling on a preliminary injunction, following intense legal challenges brought by three federal employee unions with the backing of 20 Democratic attorneys general.

The lawsuit alleges that the Office of Personnel Management's (OPM) buyout offer is an unlawful ultimatum designed to pressure government workers into resigning under the looming threat of mass terminations. The judge’s temporary restraining order, issued just hours before the program’s midnight deadline, remains in effect after the Trump administration extended the original cutoff by four days.

During a heated hearing, Department of Justice (DOJ) attorney Eric Hamilton defended the program, describing the deferred resignation offer as a "humane off-ramp" for federal employees ahead of sweeping reforms planned by President Donald Trump to restructure and downsize the federal workforce. Hamilton argued that delaying the program further would cause irreparable harm, as the administration intends to accelerate federal workforce reductions as soon as the buyout window closes.

However, Elena Goldstein, representing the unions challenging the program, criticized the Trump administration’s approach, labeling it an “unprecedented program” implemented with a hastily imposed deadline. She claimed that the OPM had failed to follow standard procedures, such as conducting thorough cost-benefit analyses, assessing potential conflicts of interest—particularly given Elon Musk’s involvement through the newly formed Department of Government Efficiency—and ensuring consistent communication with affected employees.

The buyout offer, central to Trump’s federal workforce reform agenda, was issued via an email titled “Fork in the Road,” echoing language Musk used during mass layoffs at Twitter after his 2022 takeover. The offer promised full pay and benefits until September for employees who accepted a deferred resignation by February 6, with no work obligations post-acceptance. Despite the administration’s claims of generosity, over 65,000 federal employees have already accepted the offer, raising concerns about the long-term impact on government operations.

Goldstein argued that while the president has authority to reorganize the federal workforce, OPM’s implementation of the buyout failed to meet legal requirements under the Administrative Procedure Act (APA). She emphasized that the APA mandates federal agencies to carefully consider the implications of major policy changes, which she claimed did not happen in this case. Additionally, the plaintiffs argued that the buyout violates the Antideficiency Act by relying on funds not appropriated by Congress, further questioning the program’s legality.

The DOJ countered these claims, asserting that Trump’s authority as president allows him to offer such buyouts within the executive branch and that any delay would disrupt the expectations of federal employees who have already opted in. Hamilton dismissed the unions' arguments as legally inconsistent, suggesting that halting the program would only increase uncertainty for federal workers.

Judge O'Toole, appointed by President Bill Clinton, acknowledged the urgency of the matter but refrained from making a final ruling. He emphasized the need for thorough legal consideration before allowing the program to proceed, stating, “I enjoined the defendants from taking any action to implement the so-called ‘Fork Directive’ pending the completion of briefing and oral argument on the issues.”

The Trump administration’s press secretary, Karoline Leavitt, expressed gratitude for the extended deadline, suggesting it provides more time for federal workers to consider what she described as a “once-in-a-lifetime offer.” However, unions argue that the program’s rushed timeline and lack of transparency have left many employees confused and anxious about their job security.

Legal experts have weighed in on the controversy, with Loyola Marymount law professor Justin Leavitt noting that federal agencies are required to exercise caution when enacting significant changes. He explained that while rapid innovation is common in the private sector, government decisions—especially those involving public funds and employment—must undergo rigorous review to ensure legality and fairness.

As the legal battle continues, the future of Trump’s federal employee buyout program remains uncertain. The outcome of this case could have far-reaching implications for how future administrations approach federal workforce restructuring and the legal limits of executive authority in managing government employees.