Federal Judge Temporarily Blocks Layoffs at CFPB

On February 14, by the agreement of the parties, a judge with the U.S. District Court for the District of Columbia ordered that CFPB employees could not be terminated without cause related to the specific employee’s performance or conduct, pending the resolution of the plaintiffs’ motion for a preliminary injunction.  

As background, the lawsuit was filed by CFPB employee and union organizations, among others, who sued the CFPB and its acting director to prevent the CFPB from refusing to use its available funds to do its “statutorily mandated” work.  The lawsuit alleges that the CFPB’s acting director’s order to CFPB employees to stop supervision and enforcement work is unlawful because it violates separation of powers principles by infringing on the Congressional mandate.

In addition to blocking terminations, the Judge has also instructed the CFPB that it “shall not delete, destroy, remove, or impair” any data or agency records covered by the Federal Records Act, except in accordance with 33 U.S.C. § 44, which provides procedures for authorized records disposals.