A U.S. appeals court on Friday refused to allow President Donald Trump's administration to carry out mass layoffs of federal workers and a restructuring of agencies, leaving a lower court order in place that blocked the sweeping government overhaul.

The decision by the San Francisco-based 9th U.S. Circuit Court of Appeals means that, for now, the Trump administration cannot proceed with plans to shed tens of thousands of federal jobs and shutter many government offices and programs.

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U.S. District Judge Susan Illston in San Francisco on May 22 blocked large-scale layoffs at about 20 federal agencies, agreeing with a group of unions, nonprofits and municipalities that the president may only restructure agencies when authorized by Congress.

A 9th Circuit three-judge panel on Friday, in a 2-1 ruling, denied the Trump administration's bid to stay Illston's decision pending an appeal, which could take months to resolve. The administration will likely now ask the U.S. Supreme Court to pause the ruling.

"The Trump administration will immediately fight back against this absurd order," the White House said in a statement. "A single judge is attempting to unconstitutionally seize the power of hiring and firing from the Executive Branch."

A coalition of plaintiffs praised the ruling: "The Ninth Circuit’s decision today rightfully maintains the block on the Trump-Vance administration’s unlawful, disruptive, and destructive reorganization of the federal government."

The appeals court said the administration had not provided any evidence it would suffer an irreparable injury if the lower court order remained in place and said plaintiffs were likely to prevail.

"The executive order at issue here far exceeds the president’s supervisory powers under the Constitution," said the majority opinion from Judge William Fletcher, who was appointed by Democratic President Bill Clinton. He was joined by Judge Lucy Koh, who was appointed by Democratic President Joe Biden.

Judge Consuelo Callahan, who was appointed by Republican President George W. Bush, dissented, saying the administration was likely to succeed on appeal and had suffered irreparable harm from having its policy blocked.

GOVERNMENT OVERHAUL

Illston's ruling was the broadest of its kind against the government overhaul that was spearheaded by Trump ally Elon Musk, the world's richest person and CEO of electric vehicle maker Tesla (TSLA.O), opens new tab. Along with blocking layoffs, Illston barred the Department of Government Efficiency from ordering job cuts or reorganization at federal agencies.

Dozens of lawsuits have challenged DOGE's work on various grounds, including claims that it violated labor and privacy laws and exceeded its authority, with mixed results. Two judges had separately ordered the Trump administration to reinstate thousands of probationary employees, who are typically newer hires and were fired en masse in February, but appeals courts paused those rulings.

Musk joined a farewell event in the Oval Office with Trump on Friday, marking the end of his active involvement with the administration.

Trump in February also directed government agencies to work with DOGE to identify targets for mass layoffs as part of the administration's restructuring plans.

The Republican president urged agencies to eliminate duplicative roles, unnecessary management layers and non-critical jobs, while automating routine tasks, closing regional offices and reducing the use of outside contractors. Most federal agencies have announced plans to lay off large numbers of workers, including 10,000 staffers at health agencies.

In Friday's case, the unions and groups that sued said only Congress has the authority to create agencies, shape their missions and decide their funding levels, and that large-scale layoffs undermine that power.

Illston, also an appointee of Clinton, had said in her ruling that the plaintiffs were likely to suffer a range of irreparable harms if the layoffs were implemented.

She said, for example, that a U.S. Department of Labor office in Pittsburgh that researches health hazards facing mineworkers would lose all but one of its 222 employees.

Illston gave similar examples at local offices of Head Start, which supports early learning, the Farm Service Agency and the Social Security Administration.