UPDATE February 6, 2025: Today’s deadline for accepting deferred resignation has been suspended by a federal judge in Massachusetts. OPM has been directed to notify employees of this development. A further hearing will occur next week.
Nearly every day since OPM announced the deferred resignation program, the administration has issued a new document or email seeking to sweeten the deal and convince more employees to resign. With one day until the February 6 deadline, where do things stand?
For one thing, the program was finally challenged in court. Several unions of federal employees argue that OPM violated the Administrative Procedure Act, which requires agencies to follow certain procedures and avoid arbitrary action. The unions say that the program violates the Act because OPM failed to adequately explain the program, provided inconsistent information, made promises it may be unable to keep, and for other reasons. The unions do not appear to ask for the program to be permanently ended, but argue that it should be suspended (or the February 6 deadline should be extended) while OPM attempts to develop an adequate legal justification and explanation for the program.
The suit was filed was filed in Massachusetts, where two of the plaintiff unions are headquartered. It has been assigned to Judge George O’Toole, a Clinton appointee.
The other major development is that OPM issued a formal agreement to govern deferred resignation. Soon after, OPM revised the agreement to address obvious legal deficiencies, while adding a cover memo attempting to assure employees the agreement is legally binding. The quick revision of the agreement is another sign of the sloppiness of the program.
It’s worth taking a close look at OPM’s argument that the agreement is binding, which appears at the bottom of page 1 and continues onto page 2 of the memo. There are several notable aspects of this section.
First, OPM asserts that the agreement is binding in the sense that, “were the government to backtrack on its commitments, an employee would be entitled to request a rescission of his or her resignation.” Even assuming this is true, it falls far short of genuine enforceability. OPM is not saying here that employee would be entitled to recoup the promised benefits if the administration violates the agreement, but merely that employees could rescind their resignation and come back to work. But that option may not be available if, for example, the employee has taken another job. And it’s unclear what would happen if an employee’s position was eliminated after the employee resigned.
Second, OPM cites two legal cases in footnotes, but those cases do not appear to fully support the administration’s claims. For example, OPM cites one case to bolster its statement that “separation
agreements entered into between an agency and its employees are legally binding.” But that case does not involve an employee successfully enforcing a separation agreement against the government. Rather, in that case, employees entered a separation agreement and then sought to withdraw and rescind their resignations. The agency denied withdrawal, relying on a provision stating that withdrawal could only occur upon proof of extreme hardship. The court found the limitation on withdrawal binding on the employee, ruling for the government.
In other words, the case finds only that an agency can hold an employee to the employee’s decision to resign–not that an employee can hold an agency to the promises in a separation agreement.
And the text of the OPM’s deferred resignation agreement does not resolve questions about enforceability. Paragraph 10 of the revised agreement states that agencies can rescind the agreement in their “sole discretion … which shall not be subject to review at the Merit Systems Protection Board (MSPB) or any other forum.” This suggests the agency can decide at any time to revoke the agreement, and the employee can do nothing about it.
Likewise, Paragraph 13 of the revised agreement sets forth a very broad waiver of any legal action related to the worker’s employment or the deferred resignation program. The plain language of this provision appears to make it impossible for an employee to pursue legal action to enforce the agreement. (It also bars the employee from pursuing any other legal action stemming from their employment, like a claim for sexual harassment or improper pay.)
For more information on the legal viability and enforceability of the program, we recommend Nick Bednar’s two detailed analyses at Lawfare. We also recommend that employees consult an attorney if they are thinking of accepting the offer. Updates on the lawsuit challenging the program may be posted on our Bluesky account.
-Danny Rosenthal, partner at James & Hoffman