On April 17, the CFPB issued a reduction in force (RIF) to notify employees of their release due to the elimination of their positions. In the RIF, the Bureau stated reductions were necessary to restructure the Bureau’s operations to best reflect the Bureau’s priorities and mission. The RIF explained that employees will be separated from federal service effective June 16; however, employees were instructed to download their personnel records and update personal information from internal systems, as access to work systems would be discontinued the evening of April 18.
Later on April 17, the plaintiffs in the case, originally brought by CFPB employee groups challenging the administrations’ actions, filed an emergency motion, arguing the RIFs appeared to violate the preliminary injunction issued by the district court previously (covered by InfoBytes here) even as modified by the D.C. Circuit (covered by this Orrick Insight). In their emergency motion, the plaintiffs argued it was “unfathomable” the Bureau’s statutory duties would not be impacted, or that the Bureau assessed each employee’s role in less than a week and provided no notice before cutting the Bureau’s staff by 90 percent in 24 hours. The district court set a hearing on the emergency motion for April 18.
According to the Declaration of Mark Paoletta, filed on the morning of April 18 and prior to the hearing, the CFPB’s leadership conducted a particularized assessment to identify which employees were deemed unnecessary to complete the Bureau’s statutory duties. The declaration outlined plans to consolidate operations across enforcement, supervision, and consumer response, aiming to reduce staffing from approximately 1,700 employees to just over 200 employees.
At the April 18 hearing, the district court judge stated she needed more information and evidence to determine whether the RIF violated the preliminary injunction, and raised questions about the involvement of Gavin Kliger, an OPM representative detailed with the CFPB. Judge Jackson stated she was “deeply concerned” about whether the RIF involved a “particularized assessment” and that she wanted to hear witness testimony and review underlying documents to make a determination about whether the RIF complies with the injunction. Thus, the district court set a hearing for Monday, April 28 at 9:30 a.m., allowed the plaintiffs to request up to five documents from the defendants related to the RIF process, and required briefs from both parties (April 22 for the defendants’ brief, and April 24 for the plaintiffs’ brief).
Finally, the court ordered the defendants to delay the RIF and allow CFPB employees to access the agency’s systems until the court issues an order following the April 28 hearing.
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