Federal Judge Halts Mass Layoffs at Consumer Financial Protection Bureau

In a significant legal intervention, a federal judge has put a temporary stop to the mass layoffs executed at the U.S. Consumer Financial Protection Bureau (CFPB). This ruling follows a wave of dismissals that reportedly impacted between 1,400 and 1,500 employees--amounting to nearly 90% of the agency's workforce.

The judge expressed serious concerns regarding potential violations of court orders that were established to govern employee terminations. The layoffs were carried out on a Thursday afternoon, prompting immediate legal scrutiny. A witness statement submitted the following day claimed that senior officials from the CFPB and a representative associated with the Department of Government Efficiency, linked to billionaire Elon Musk, were disregarding these court directives.

Allegations surfaced against Gavin Kliger, a member of the Department of Government Efficiency, accusing him of enforcing unreasonable work conditions that included demanding staff to undertake 36-hour shifts without breaks and subjecting them to verbal abuse. However, Kliger's office has dismissed these claims as "an outright lie," stating that he was not involved in the recent reductions in staff.

According to the Office of Personnel Management, the agency defended its actions, asserting that the allegations are an attempt to undermine its mission to enhance governmental effectiveness and efficiency. Mark Paoletta, the CFPB's chief legal officer, stated under oath that the agency had complied with the court's instructions and performed a comprehensive assessment of its staffing requirements, concluding that its resources far exceeded its operational needs.

Despite these assertions, Jennifer Bennett, an attorney representing a union of CFPB employees in a lawsuit against the agency, indicated in a sworn declaration that essential offices within the CFPB had been left with either one or no employees. These offices are responsible for critical functions, including consumer complaints, military service member affairs, and supervision.

Both President Trump and Musk have previously advocated for the elimination of the CFPB, alleging without substantial evidence that it engages in politicized enforcement and wasteful expenditure. Nonetheless, government representatives have indicated in court proceedings that the CFPB will remain in some capacity.

During a hearing convened in response to the mass layoffs, Judge Amy Berman Jackson voiced her apprehension regarding the rapid and extensive nature of the dismissals, questioning whether the CFPB was in compliance with the preliminary injunction. She ordered an immediate suspension of the layoffs while the court reviews the situation to determine if the government violated her prior order. Additionally, she assured that employees affected by the dismissals would maintain access to their computer systems, contrary to what they had been informed in the termination notices.