The deferred resignation program is back, at least for some agencies. Anecdotally, employees seem more open to accepting the second round. The last few months have been taxing. Probationary employees have been terminated, then placed in limbo as they are reinstated under temporary court orders. Employees have been forced to report their accomplishments to Elon Musk. Many have received RIF notices, and others fear that a notice is on the way. Some employees have been told that they are being placed into Schedule Policy/Career. With each of these developments, resignation looks more appealing.
Weighing the benefits and costs
And yet, the value of the offer has fallen. In January, employees were being promised eight months of pay, through September 30. Now, it is less than six months. But the true value of the offer is less than that.
To illustrate, imagine that an employee fears an imminent RIF. If the employee receives a RIF notice in mid-April, they should remain on the payroll until mid-June, assuming the agency provides the 60 day notice typically required by regulations. Thus, accepting deferred resignation means that the employee would be paid through the end of September rather than the middle of June, a benefit of about three and a half months beyond what the employee likely would have received if RIF’ed.
This calculation does not take into account that accepting deferred resignation likely means losing the right to severance pay (for those eligible) and unemployment compensation. This further reduces the value of the offer. And beyond that, there may be an impact on retirement benefit options, depending on the terms of the agency’s offer.
For employees who fear placement in Schedule Policy/Career, it is also worth noting that current regulations provide that employees retain their civil service protections if placed in the new schedule. See 5 C.F.R. § 302.602(c)(ii). So long as this regulation remains in place, such employees would likely not face immediate termination and would have the right to challenge their termination.
For these reasons, the value of deferred resignation may be less than it appears, even assuming the government keeps its word. What about the costs?
Obviously, by accepting deferred resignation, employees give up the possibility of continued employment with the government after September 30. Employees must also forfeit the ability to pursue any legal claim related to their employment. This includes claims related to the employee’s termination, as well as claims for discrimination, harassment, and denial of reasonable accommodation, to name a few examples.
Importantly, for probationary or trial employees who were terminated in February or March, those who sign a deferred resignation agreement may give up their right to participate in MSPB class actions or other legal claims challenging their terminations. For now, agencies have reinstated most of these employees, and many agencies have paid or have promised backpay. But those actions were based on temporary court orders. If the court orders expire or are reversed, agencies could potentially revoke those reinstatements, reassert the original terminations, and perhaps even seek to recoup backpay. It is unclear whether the affected employees would then have any recourse if they signed the deferred resignation agreement.
Is the new deferred resignation program more enforceable?
We previously described significant concerns regarding the enforceability of the deferred resignation program. For the most part, the new iteration faces the same problems.
It is difficult to analyze these issues as a general matter because the proposed agreements now seem to vary by agency. Some agencies appear to have addressed a few of the most glaring flaws in the prior agreement, such as the provision allowing the agency to revoke the offer at any time in its sole discretion, even after an employee had accepted it.
But still, there is no clear path to enforceability. As a general matter, courts have usually not allowed federal government employees to enforce contracts that govern their employment. The past few months have not brought any new statute or regulation to change this doctrine. Thus, it is unclear whether employees will have any recourse if they accept the agreement but are then terminated before September 30.
There are also some new provisions that raise concerns in the deferred resignation agreements that have been provided to employees.
For example, at the Department of Labor, employees were offered an agreement with this provision:
“Employee shall not be subject to furlough, termination, reduction in force or layoff as a result of an agency-initiated reorganization or reduction in force.”
This provision seems to imply that an employee who accepts the agreement could nevertheless be terminated, so long as the termination is initiated by OPM, DOGE, or the President. Notably, the administration has sought to give more power to OPM and DOGE to meddle in agency personnel decisions.
A similar provision appears in the deferred resignation agreement for the Department of Transportation. By contrast, the agreement for Department of Interior does not contain this language. Yet, it includes a new provision permitting the agency to violate the agreement based on “events outside [its] control,” which arguably could include a directive from OPM, DOGE, or the President.
For these reasons, the possibility remains that an employee might be fired even if they accept the offer, and that there would be no legal avenue to challenge the termination.
We have not yet reviewed draft agreements for other agencies, so we cannot speak to the specifics of those agreements.
Conclusion
Of course, there is no single right decision for everyone. Whether inclined to stay or go, employees should make their decision with a full understanding of the facts. For those seriously considering the offer, we recommend seeking further specific advice from a labor union, attorney, or other expert, if possible.