A familiar courtroom in San Francisco is once again at the center of a clash between federal unions and Donald Trump’s administration. U.S. District Judge Susan Illston — who earlier blocked Trump’s sweeping plan to slash thousands of federal jobs — has now taken control of a new case challenging the administration’s attempt to lay off workers amid the ongoing government shutdown.
The American Federation of Government Employees (AFGE) and the American Federation of State, County and Municipal Employees (AFSCME) asked for Illston to preside, arguing the new dispute mirrors their previous fight over Trump’s agency reorganization drive. On Tuesday, the judge agreed.
The unions contend that Trump’s push to implement mass layoffs during the funding lapse violates federal law, insisting that such dismissals are not “essential services” allowed under shutdown protocols. They’re seeking to block the move before it begins.
Trump, meanwhile, has pinned the blame for the shutdown on Democrats in Congress. Despite his repeated threats of layoffs, no pink slips have yet been issued.
Illston’s previous ruling, issued in May, temporarily halted the administration’s attempt to downsize multiple federal agencies. The Supreme Court later paused that ruling, but the White House softened its stance after tens of thousands of federal employees took buyouts or retired early.
The new lawsuit accuses the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) of overstepping their authority by authorizing agencies to conduct layoffs during the shutdown. The unions argued that having separate judges oversee the two cases risked “conflicting outcomes” over nearly identical questions of executive power.
Illston — appointed by former President Bill Clinton — offered no explanation for reclaiming the case from Judge Vince Chhabria, who had initially been assigned to it.
At the heart of the dispute lies a familiar constitutional tension: how far a president can go in reshaping the federal government without congressional approval. In her earlier decision, Illston made her stance clear — that neither agencies nor the White House can unilaterally dismantle the machinery of government.
The case, American Federation of Government Employees v. Office of Management and Budget, now becomes the next major test of the Trump administration’s effort to wield executive power amid a shutdown of its own making.
