Trump Sues to Void Treasury Department Workers’ Union Deal (2)

The Trump administration sued to nullify the Treasury Department’s labor contract with the nation’s second largest federal union.

The lawsuit against an affiliate of the National Treasury Employees Union, docketed Monday, references President Donald Trump‘s order directing agencies across the executive branch to stop collective bargaining with federal unions. In his order, Trump cited a 1978 law that empowers him to prohibit employees whose work “directly affects national security” from organizing. His directive included the Treasury Department, even though portions of its workforce aren’t clearly involved in that effort.

The union contracts “restrict the president’s ability to manage the IRS as he deems best,” the Trump administration wrote in the complaint.

The lawsuit is part of the Trump administration’s broader campaign to lay off swaths of federal employees, including at the IRS. The administration is aiming to cut up to half of the agency’s workforce compared to its January head count by the end of 2025.

NTEU launched a legal counterattack Monday morning, arguing that Trump exceeded his authority and violated the law with his order claiming many agencies are excluded from labor law obligations because of national security concerns.

The Trump administration separately sued the American Federation of Government Employees on March 27 to nullify its agreements with that union. AFGE represents more than 800,000 federal employees.

The case is US Dep’t of Treasury v. Nat’l Treasury Employees Union Chapter 73, E.D. Ky., 2:25-cv-00049-DCR, complaint filed 3/28/25.