CFPB Union Continues Appeal Of ‘Reduction In Force’

Despite a Supreme Court ruling allowing federal workforce reductions to proceed, the CFPB union’s separate legal challenge to bureau-specific layoffs continues in the D.C. Circuit Court.

While the U.S. District Court for the Eastern District of Texas recently vacated the Consumer Financial Protection Bureau’s medical debt credit reporting rule, a separate case related to the bureau’s operations under Acting Director Russell Vought continues in the D.C. Circuit Court.

The Trump administration previously announced a “reduction-in-force” initiative that would result in layoffs of more than 1,500 CFPB employees. This action is being challenged in court by the bureau’s union, the National Treasury Employees Union.

The Trump administration also announced mass staff reductions across the federal workforce through an executive order, which the U.S. Supreme Court recently ruled could proceed.

“In a brief unsigned opinion, the justices temporarily paused an order by a federal judge in San Francisco that prohibited the government from carrying out the executive order while its appeals continue,” according to a report on Scotusblog.com. “The majority explained that, in its view, the Trump administration is likely to prevail on its argument that the executive order and a memorandum from the Office of Management and Budget and the Office of Personnel Management intended to implement the executive order are legal – a key criterion in determining whether to grant temporary relief.”

CFPB Not Impacted by Supreme Court Ruling

The key difference between the CFPB union’s case and the recent Supreme Court ruling on the executive order is that the union is not among the 19 plaintiffs in the Supreme Court case.

 ”We are not directly impacted. We also have our own litigation which currently prohibits [reductions in force, or RIFs] and firings at least until the D.C. Circuit issues its decision,” a CFPB union spokesperson said in a statement, American Banker reports. “Even so, the SCOTUS decision doesn’t really mean a whole lot to any agencies. Any future RIF still needs to follow the law, and there will be additional litigation if, as seems likely, the [administration] doesn’t follow the law.”

The CFPB union is challenging several actions taken by Vought under the Trump administration, including a past stop-work order and the termination of bureau employees — further differentiating the two court cases, as previously reported by ACA International.

The Supreme Court case “does not directly affect the CFPB case,” David Silberman, senior advisor at the Financial Health Network and a former CFPB associate director, told American Banker.

He added that in the CFPB case, the Trump administration has recognized it cannot dismantle the CFPB and must maintain its statutory requirements.

“If the court were to agree that this is not really a shutdown case but a reduction in force case, the Supreme Court’s order … suggests the court would be sympathetic to the argument that the Administration has discretion to decide how many employees are needed,” Silberman said in the American Banker article. “In that sense, the [Supreme Court] case could be relevant to the CFPB case — but only if the court agrees that this is not about an attempt to shut down the agency.”