Arbitrator Rules Trump Administration's Mass Probationary Firings at HHS Were Illegal

Arbitrator Rules Trump Administration's Mass Probationary Firings at HHS Were Illegal

In a major legal defeat for the Trump administration's aggressive campaign to downsize the federal workforce, a third-party arbitrator has ruled that the Department of Health and Human Services (HHS) violated its collective bargaining agreement and federal law when it terminated over 5,000 probationary and trial employees in 2025.¹

Arbitrator Kathleen Jones Spilker sustained a national grievance filed by the National Treasury Employees Union (NTEU) on July 24, 2026. The ruling finds that HHS violated its agreement with the union during two separate waves of mass layoffs: the termination of approximately 3,495 employees on February 14, 2025, and another 1,600 employees on May 8, 2025.

Spilker ruled that the mass terminations were not individualized performance assessments but rather a coordinated, government-wide downsizing effort that bypassed statutory civil service protections:

"The agency did not conduct an individualized assessment of the approximately 3,495 employees it terminated on Feb. 14, 2025, nor of the approximately 1,600 employees it terminated on May 8, 2025. The sheer large number of employees that were terminated in a matter of days discredits any argument that these terminations were due to an analysis that individual employees were performing unsatisfactory or for conduct reasons... In practice, it should have taken weeks or months to review the individual performance of 3,495 employees. Instead, the agency executed a centrally-directed downsizing effort, applying the same justification across the board to an entire class of employees because it was ordered by the President... Accordingly, one must conclude that the agency’s Feb. 14, 2025 action was clearly from its inception through its execution a reduction in force masquerading as probationary terminations."

By executing a "reduction in force masquerading as probationary terminations," HHS bypassed its contractual obligations to provide advance notice to the union and negotiate the terms of the layoffs.

Furthermore, the arbitrator found that for the May 8, 2025 terminations, HHS unlawfully relied on a regulation (5 C.F.R. § 11.5) that was not yet effective until July 2025:

"The agency could not justifiably rely on this because a [regulation] is binding until properly amended, which in this case, would not be until the effective date of the new regulation. Executive orders cannot directly amend the Code of Federal Regulations (CFR), but agencies must follow the regulations currently in place until they are repealed through rulemaking... Where the new regulations were not yet in effect there was not a vacuum. Unwittingly, the agency violated Subpart H of part 315 of title 5, Code of Federal Regulations by its May 8, 2025 actions."

NTEU National President Doreen Greenwald celebrated the victory, highlighting that the performance of the workers was never the issue:

"The mass HHS layoffs are not only disastrous for employees and the public they serve — they are also illegal. We are grateful to the NTEU members whose brave testimony proved that they were not fired for their performance. In reality, they had superior performance evaluations doing critical public health and safety work on behalf of all Americans."

This arbitration victory is the second major blow to the Trump administration's labor and workforce policies in July 2026, coming just a week after another arbitrator ruled that the IRS's return-to-office orders violated its collective bargaining agreement. While HHS is expected to appeal the decision to the Federal Labor Relations Authority (FLRA), the ruling provides a critical legal precedent for unions contesting mass federal layoffs.