Judge delays ruling in case by USAID personal services contractors

The judge overseeing the lawsuit brought by U.S. Agency for International Development personal services contractors delayed his decision on a temporary restraining order at a hearing on Wednesday, indicating that he would need an additional day or two to review the information before ruling. U.S. District Court Judge Carl Nichols, who is also presiding over the case brought by USAID employee unions, said he would decide on the temporary restraining order at a subsequent hearing, scheduled either Thursday or Friday. The Personal Services Contractors Association, which represents more than 1,000 PSCs at USAID, filed the lawsuit on Feb. 18. They contend that the termination of PSCs, who perform many identical functions as direct hire employees, is unconstitutional. Much of Wednesday’s hearing focused on establishing the plaintiffs’ legal standing, the irreparable harm they would suffer, and how their case differs from the union case, where Nichols sided with the government, denying a preliminary injunction to block the mass firing of agency staff. Carolyn Shapiro, the plaintiff’s lawyer, argued that the judge should come to a different conclusion in the case, citing the imminent destruction of USAID, the irreparable harm to PSCs facing termination, and the unique avenues for legal recourse available to government employees compared to contractors. The lawsuit seeks no monetary compensation; rather, the plaintiffs argue that the court must halt the government's actions to close the agency and lay off staff. These actions are taken by people without the requisite authority, thereby violating the Constitution and other laws. They notably overstep executive branch authority by refusing to spend money appropriated by Congress, Shapiro said. Unlike in the union case, where “elaborate” civil and foreign service labor laws apply, Shapiro noted that the contract dispute act offers a more “narrowly defined” avenue of recourse for PSCs is much more “narrowly defined,” she said. During the hearing, the judge questioned why this argument hadn’t been included in earlier court filings, to which Shapiro responded that she was happy to provide a written brief and was doing her best “on an abbreviated timeline.” These issues seemed central to why the judge opted to take additional time to review the relevant laws before issuing a ruling on the temporary restraining order. PSCs allege that they will suffer. With only 15 days’ notice prior to termination, some will be forced to return to the U.S. from overseas abruptly, often with nowhere to go, no income, and no health insurance. Those living abroad could lose diplomatic status and protections and could face sanctions or legal liabilities tied to breaking leases and other agreements. U.S.-based staff also face significant impact, including one potentially losing custody of a child because she is now unemployed, and others being doxxed by the Department of Government Efficiency, DOGE, which has exposed their personal information online. Shapiro stressed the urgency of the court’s intervention, arguing that remedies available at the end of the legal process will “come too late.” The government’s defense mirrored its position in the union case, arguing that the scenarios were substantially similar, with the distinction that some plaintiffs are contractors and others direct hires. The government’s lawyer said that PSCs abroad would be repatriated within 15 days, and the government would be willing to address extreme cases on an individual basis — such as a contractor in Mogadishu, Somalia, or one with a spouse that is 36 weeks pregnant — though managing such cases is difficult due to the plaintiffs anonymity in the lawsuit.