Trump Executive Order Targets Federal Unions and Sparks Legal Battle over Bargaining at 18 Agencies

By Executive Order dated March 27, 2025, entitled, “Exclusions from Federal Labor-Management Relations Programs,” President Trump moved to end collective bargaining with unions at 18 federal agencies and urged them to void their current labor agreements. The agencies affected include the Departments of State, Defense, Treasury, Interior, and Homeland Security. The same day, these agencies, led by the Department of Defense, took up the mantle of the Executive Order and sued in U.S. District Court in Texas to cancel their labor agreements. United States Department of Defense et al v. American Federation of Government Employees, AFL-CIO, District 10 et al. Case Number 6:25-cv-00119. The defendants are subdivisions of the American Federation of Government Employees.

Presently, four agencies are exempt from labor bargaining – the FBI, CIA, NSA, and the Secret Service. In enacting those exemptions, Congress further allowed the President to designate other agencies as exempt from collective bargaining if the agency has “intelligence, counterintelligence, investigative, or national security as a primary function.” Picking up on this language, the White House’s new order, if upheld, would add agencies or subagencies that have as a primary function intelligence, counterintelligence, investigative, or national security work. Along with directing the agencies to cancel their agreements, the Order directs agencies to terminate agency participation in any pending grievances.

In its Complaint, the agencies emphasized the two-fold presidential mandates of improving efficiency and promoting national security. They contend that their CBAs should be invalid in part because they extend as long as five years and were signed by the outgoing Administration in the interim between the election of President Trump and the inauguration. According to the plaintiff agencies, these so-called “midnight” CBAs unduly restrict unilateral action on work terms such as return-to-work policies favored by the present Administration and cede swift executive decision-making to private arbitrators in grievance adjudication. Consistent with the Executive Order, the Office of Personnel Management has greenlighted agencies to take unilateral action on return-to-work policies.

The President and the agencies claim the collective bargaining process impedes the effective execution of their missions. The unions would argue this is part of the normal give-and-take of labor relations. It is expected that other unions will fight the Executive Order and lawsuit. The agencies seek a declaratory judgment from the court giving them freedom to rescind labor contracts and granting them insulation from labor actions. One key question is whether Congress intended to exclude only the four enumerated agencies from collective bargaining. Another question before the court is whether an existing labor contract can be rescinded. The fight in the courts is expected to have immense significance for both public sector labor law and presidential authority.

Should you have any questions, please contact Partners Edward J. Bonett, Jr., Esq. at 908.546.6991 or via email here, Patrick W. McGovern, Esq. at 973.535.7129 or via email here, or any Partner in our firm’s Labor Law Practice Group.