Judges Rule Trump’s Federal Employee Firings Were Illegal

President Donald Trump and Department of Government Efficiency (DOGE) head Elon Musk may not get to fire all the government employees they want to. Two judges have ruled against federal employee firings that took place last month across several government departments. These firings largely targeted probationary employees.

The rulings from the two judges, California U.S. District Judge William Alsup and Maryland U.S. District Judge James Bredar, focus on the legality of the firings. According to them, the Trump administration didn’t follow the proper legal procedure for many of the layoffs. That includes those that hit employees of the Department of Commerce, Veterans Affairs, the Environmental Protection Agency, and several others.

The judges ruled that the firings weren’t legal because the Trump administration didn’t provide evidence of employee performance as the reason for them. Instead, the judges argue the firings were actually mass layoffs.

Will Government Employees Get Their Jobs Back?

Both judges ruled that the federal government should reinstate employees fired last month. Alsup’s ruling gives the government one week to rehire fired employees and provide him with a list of the changes made.

While these rulings may get federal employees their jobs back, they may not keep them for long. The Trump administration intends to fight these rulings, which could take the case all the way to the U.S. Supreme Court. While it’s unclear how the Supreme Court would rule on this case, the majority of its justices are right-leaning.

What Does This Mean for the Stock Market?

Federal layoffs are tied to the jobs market, which is a part of the larger economy. Investors have closely watched jobs reports and other economic data to get a feel for how the stock market will perform under President Trump. Markets are currently volatile as the President accelerates a trade war with some of the U.S.’s closest economic allies.

This has resulted in traders retreating to safe-haven investments, such as gold or government bonds. Others have started investing in leveraged and short exchange-traded funds (ETFs) as the stock market suffers. One popular choice is the ProShares UltraPro Short QQQ (SQQQ), which tracks the Nasdaq 100 (NDX) and seeks three times the inverse of its daily performance.

See more inverse and short ETF comparisons