The Consumer Financial Protection Bureau was forced by a federal court order to rehire employees who were fired last month by the Trump administration. Now the CFPB's union is claiming that dozens of employees who were let go in early February by acting CFPB Director Russell Vought have not been reinstated, violating the order.
In the legal and administrative challenges of restoring operations at the CFPB, the local chapter of the National Treasury Employees Union claims that a few dozen employees have not been rehired.
On Wednesday, Catherine Farman, the president of the CFPB's NTEU Chapter 335, questioned why officials had failed to reinstate all of the agency employees who had been terminated. Vought fired roughly 200 CFPB employees in February but between 30 and 40 temporary, or "term," employees were not rehired, the union claims. The Justice Department narrowly interpreted a federal court order and only reinstated probationary employees, who were hired in the past two years, excluding temporary workers who were not on probation when they were fired.
Farman said in an email to the CFPB's director of labor relations, obtained by American Banker, that the fired employees face dire consequences, including loss of healthcare, amid the turmoil that had brought the agency to a standstill.
"This situation is both illegal and unconscionable," Farman wrote in the email to Ari Taragin. "Without your immediate action, you and anyone working on these matters will be in defiance of the judge's order."
The CFPB has become a crucial test of the limits of President Donald Trump's power to dismantle government agencies. The CFPB's union
The union continues to battle the Trump administration in federal court cases in Washington, D.C., and Maryland, and is trying to keep the agency's legally mandated functions operating, claiming that only Congress can shutter federal agencies.
The CFPB has slowly restarted legally required work, including some enforcement investigations, though enforcement attorneys remain restricted in what they can do.
The Trump administration was forced to reinstate probationary employees at 18 agencies — including the CFPB — after Judge James Bredar of the U.S. District Court for the District of Maryland ruled last week that the mass firings were unlawful workforce reductions, not performance-based dismissals as the government claimed. The Maryland lawsuit was filed by 20 Democratic state attorneys general who alleged the Trump administration conducted mass firings without first notifying the states, in violation of federal statute and regulations that govern reductions in force.
The CFPB did not respond to a request for comment.
Deepak Gupta, the lawyer representing the CFPB's union and other plaintiffs, said Thursday
Reinstating the probationary employees and placing them on administrative leave was not enough, Gupta said.
"This narrow, temporary relief — which the government has already appealed — does not obviate the need for a preliminary injunction here," he wrote.
U.S. District Court Judge Amy Berman Jackson is looking to rule in favor of the CFPB and is considering whether to grant the union a preliminary injunction ordering the bureau to return to its normal functions. A proposed preliminary injunction would require the CFPB to do a number of things including maintain — and not destroy — any CFPB data and records; halt any employee firings including mass firings; reinstate any probationary and term employees; and rescind all contract terminations.
Crucially, the CFPB under a proposed preliminary injunction would not be able to enforce any stop-work order or require employees to take administrative leave. Most CFPB employees have been on administrative leave for the past five weeks and have been political pawns in the Trump administration's efforts to dismantle federal agencies.
Farman, the union president, said terminated employees will lose their health insurance coverage after Tuesday and a gap in health insurance coverage for any of the terminated employees would violate the court order.
"CFPB fired the employees who you are denying reinstatement under the same circumstances as those you are reinstating, and used the same false justifications that this judge and others now recognize as illegitimate," Farman wrote.
Probationary employees, who were hired in the past two years, received letters over the weekend notifying them that they could have their jobs back. Their termination actions were canceled and they will receive back pay by March 31.
The CFPB will be bound by whatever court order is in place even when Jonathan McKernan, the nominee to lead the CFPB on a permanent basis, is confirmed by the Senate. McKernan would succeed Vought.
McKernan told the Senate Banking Committee during his nomination hearing that he would
