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AFSCME sues Labor Department over rule ending merit staffing for job centers

AFSCME sues Labor Department over rule ending merit staffing for job centers

Rule Changes

Union challenges rule that would end merit-based hiring for state-run job-search offices

September 10th, 2026: AFSCME files lawsuit against DOL

Overview

Updated Sep 11

The American Federation of State, County and Municipal Employees sued the Labor Department on September 10 over a rule that ends merit-based hiring at the nation's job-search offices. The rule, published August 20, takes effect October 19. It lets states replace career civil servants with contractors or non-merit staff in the Employment Service, a federal-state program created in 1933.

AFSCME, represented by Public Citizen Litigation Group, says the rule violates the Wagner-Peyser Act and is arbitrary and capricious under the Administrative Procedure Act. The union warns that members in fifteen states could lose jobs or bargaining power. It says the change opens the door to privatization and political patronage.

Why it matters

If the rule stands, America's job centers could hire staff without merit-based selection, replacing career civil servants with political appointees or contractors.

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Key Indicators

93
Years merit staffing has been required
The Wagner-Peyser Act of 1933 established merit-based hiring standards for Employment Service staff.
50
States that administer Employment Service offices
Federal funding flows to state workforce agencies that operate job-search and placement services.
3
Union lawsuits against administration civil service changes
Challenges to OPM suitability and performance rules, USDA reorganization, and this DOL rule.
Oct 19
Rule effective date
The staffing rule takes effect October 19, 2026, unless a court blocks it first.

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People Involved

Lee Saunders
Lee Saunders
Former president, American Federation of State, County and Municipal Employees
No longer serving as president; Public Citizen's 2026 announcement of the DOL lawsuit identified Patrick Moran as AFSCME's current president
PM
Patrick Moran
President, American Federation of State, County and Municipal Employees
Leading AFSCME's challenge to the DOL staffing rule

Organizations Involved

American Federation of State, County and Municipal Employees
American Federation of State, County and Municipal Employees
Public-sector labor union
Plaintiff in lawsuit against the Department of Labor

The largest public-sector union in the United States, representing about 1.3 million workers.
U.S. Department of Labor (DOL)
U.S. Department of Labor (DOL)
Federal Agency
Defendant in lawsuit

The federal agency that funds and sets standards for the Employment Service program.
U.S. Employment Service
U.S. Employment Service
Federal-state workforce program
Program at center of the legal dispute

A federally funded program in which states operate job-search and related services for workers.

Timeline

June 1933 September 2026

3 events Latest: September 10th, 2026 · 2 months ago

  1. AFSCME files lawsuit against DOL

    Latest Legal

    Union sues in U.S. District Court for the District of Columbia, citing Administrative Procedure Act violations.

  2. DOL issues final rule ending merit staffing

    Rule Change

    The Department of Labor publishes the final rule 'Wagner-Peyser Act Employment Service Staffing' (91 Fed. Reg. 54024), removing 20 C.F.R. § 652.215 and the merit-staffing requirement for Employment Service workers. The rule takes effect October 19, 2026.

  3. Wagner-Peyser Act creates the Employment Service

    Legislation

    Law establishes the federal-state job-search program and requires merit-based hiring for its staff.

Scenarios

1

Court blocks DOL rule with injunction

Likely Resolves by Apr 10, 2027

Discussed by: Bloomberg Law; labor law analysts

AFSCME's case follows a pattern of courts blocking administration attempts to waive statutory merit protections. If the D.C. district court grants a preliminary injunction, DOL must halt implementation while the case proceeds. Judges have been receptive to similar arguments in cases over OPM's personnel rules and the USDA reorganization.

2

Court upholds DOL's staffing rule

Possible Resolves by Sep 10, 2027

Discussed by: Administration lawyers; agency defenders

DOL could argue the statute gives the Secretary discretion to set staffing standards and that merit requirements are outdated. If the court defers to the agency's reading, the rule stands and states gain flexibility in hiring. The union would then face an uphill appeal through the D.C. Circuit.

3

DOL withdraws rule under legal pressure

Possible Resolves by End of 2026

Discussed by: Previous administration practice

Facing litigation costs and legal risk, DOL could rescind the rule or issue a revised version that retains merit requirements. The prior administration rescinded Trump's Schedule F and similar moves. A withdrawal would end the case and satisfy the union without a final court ruling.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

October 2020

Schedule F executive order (October 2020)

Trump signed an executive order reclassifying tens of thousands of career policy-making federal employees as at-will, stripping them of civil service protections. Unions and oversight groups challenged the order as a violation of the merit system principles.

Then

The order never took full effect before Trump left office.

Now

Biden rescinded it in January 2021. The episode became a template for subsequent attempts to weaken federal worker protections.

Why this matters now

This DOL rule is part of the same effort to dismantle merit-based hiring in the federal government, renewing a fight unions won in the prior administration.

2018

Federal employee union challenges to 2018 executive orders

Trump signed executive orders restricting federal employee union rights and speeding up disciplinary firings. AFGE and other unions sued, arguing the orders violated federal labor law and exceeded executive authority.

Then

The Federal Labor Relations Authority struck down the union-representation portions in 2019.

Now

Courts reaffirmed that agencies cannot unilaterally rewrite civil service rules without statutory authority, a precedent the current suit invokes.

Why this matters now

The AFSCME case relies on the same legal principle: agencies cannot waive statutory requirements through rulemaking alone.

June 1933

Wagner-Peyser Act and the New Deal employment system (1933)

Congress created the Employment Service to coordinate job placement through state offices during the Depression. The law made merit-based staffing a condition of federal funding, a response to patronage abuses in earlier state employment systems.

Then

States built a nationwide network of job centers under federal standards.

Now

Merit staffing became a cornerstone of the program, surviving intact for 93 years until this rule change.

Why this matters now

The current dispute turns on whether DOL can unilaterally undo a staffing standard that has been law since the New Deal.

Sources

(10)
+4
Bloomberg Law AFSCME American Federation of Government Employees Connecticut Office of the Attorney General Public Citizen Federal Register FedSmith.com Missoula Current AFSCME U.S. District Court for the District of Columbia (complaint)