In today’s news and commentary, the Trump Administration reaches a settlement with federal unions on reduction in force actions; the United Auto Workers file an en banc petition seeking review of a Second Circuit decision regarding labor arbitrations.

On Friday, the Trump Administration reached a settlement with federal unions including the American Federation of Government Employees (AFGE), the American Federation of State, County, and Municipal Employees (AFSCME), and National Treasury Employees Union (NTEU), regarding the Administration’s reduction in force (RIF) actions taken during last year’s government shutdown. As part of the settlement, federal agencies will rescind all RIF notices issued between October 1, 2025 and November 12, 2025. Additionally, all 4,200 employees who received notices have been reinstated to their positions. The settlement comes after a year of litigation between the Administration and federal unions. As I covered, Judge Susan Illston of the U.S. District Court for the Northern District of California issued a preliminary injunction last fall that blocked agencies from going forward with the RIFs. The government attempted an appeal to the Ninth Circuit in January which was denied. AFSCME President Patrick Moran celebrated the settlement on Friday, stating that while it “places limits on their ability to use federal workers as bargaining chips to push their extreme agenda during the next government shutdown… the fight is far from over. We will remain vigilant against this administration’s attacks on federal workers and keep organizing so they can secure the protections that come with a union contract.” Other RIF plans, including mass firings at the USDA, remain in effect.

On Wednesday, the United Auto Workers (UAW) filed an en banc petition in the Second Circuit seeking review of a three-judge panel’s decision earlier this month. In this decision, the panel upheld the Western District of New York’s ruling requiring the union to re-arbitrate the firing of Ford employee Robert Suzek. While the company fired Suzek following a harassment investigation in 2022, an arbitrator ultimately found that Ford lacked just cause to terminate. Upon being reinstated, Ford again fired Suzek for lying during the original harassment investigation. The court’s determination that the UAW needs to pursue another round of arbitration to challenge the firing could have outsized consequences for the scope of just cause employment protections. Generally, when an arbitrator makes a just cause determination, they base their decision on “what is fair and reasonable, when all of the applicable facts and circumstances are considered.” This means that when an arbitrator finds that a company lacked just cause to fire an employee, they lacked just cause for every possible reason for termination. The Second Circuit’s ruling could potentially undermine this principle by allowing companies who lose a just cause arbitration to re-terminate the same employee for an alleged violation that wasn’t sufficiently addressed in the original arbitration. Such a change incentivizes employers to force unions into successive rounds of arbitration for the same conduct until either party lacks the willpower, or financial resources, to continue.