By Daniel Wiessner
(Reuters) -A federal judge has rejected a bid by the U.S. Treasury Department to cancel a union contract covering tens of thousands of IRS staff, an early blow to President Donald Trump’s efforts to eliminate collective bargaining rights for many federal workers.
U.S. District Judge Danny Reeves in Lexington, Kentucky, said in a written opinion late Tuesday that the department lacked legal standing to bring a lawsuit against the National Treasury Employees Union.
After Trump issued an executive order exempting Treasury and other agencies from union bargaining obligations, the agency sued an affiliate of the NTEU that represents Internal Revenue Service employees, to invalidate a bargaining agreement reached in 2022.
Reeves, an appointee of Republican former President George W. Bush, dismissed the case, saying the lawsuit was premature because Treasury had not yet taken any steps to implement Trump’s order.
“This decision says nothing of the merits of the case,” the judge wrote. “Had Treasury filed suit in response to an invasion or threatened invasion of its sovereign right to enforce [Trump’s order], a different result likely would have been reached.”
A U.S. appeals court last week paused a ruling by a judge in Washington, D.C., that had blocked seven agencies including Treasury from implementing Trump’s order in a lawsuit by the NTEU.
The White House, the Treasury Department and the NTEU did not immediately respond to requests for comment.
Trump in the executive order excluded from collective bargaining obligations agencies that he said “have as a primary function intelligence, counterintelligence, investigative, or national security work”.
The order applies to the Justice, State, Defense, Treasury, Veterans Affairs, and Health and Human Services departments, among other agencies. The NTEU has said the order applies to about 100,000 of its 160,000 members.
The Treasury Department sued the NTEU affiliate a day after Trump issued the order, seeking a declaration that gave Treasury the authority to end its bargaining relationship with the union.
The department said that federal civil service law empowers the president to exempt agencies from bargaining when he deems it necessary to protect national security, and that courts lack the authority to review and second guess those determinations.
NTEU and other federal worker unions have accused Trump of issuing the order to punish them for bringing legal challenges to a number of his policies.
U.S. District Judge Paul Friedman in Washington, D.C., ruled in the NTEU’s lawsuit in April that Trump had not adequately justified reversing decades of practice and exempting large swaths of the federal workforce from bargaining. But an appeals court panel in blocking that ruling said it was likely to be overturned on appeal.
Eight federal agencies have filed a separate lawsuit against the American Federation of Government Employees, the largest federal worker union, seeking to invalidate existing union contracts covering thousands of workers. The union has moved to dismiss that case, with a hearing scheduled for June.
(Reporting by Daniel Wiessner in Albany, New YorkEditing by Peter Graff)
