Federal government and unions reach settlement ending mass layoffs during shutdown

Public-sector unions and the federal government reached a legal settlement that overturns a 2025 memo ordering mass layoffs during the longest shutdown in U.S. history. The agreement, announced in a court filing, cancels the directive and restores the roughly 4,200 employees who had received reduction-in-force notices across multiple agencies. Union presidents Everett Kelley and Randy Erwin hailed the decision as a triumph for workers and the rule of law.

A preliminary injunction issued by Judge Susan Illston had already blocked the layoffs, and the settlement extends that protection. The Justice Department did not respond to requests for comment, and the litigation will stay dormant until year-end.