Judge Blocks USDA Reorganization and Employee Relocations Nationwide

A federal court has blocked the U.S. Department of Agriculture from proceeding with a sweeping restructuring plan that includes closing offices and relocating about 2,600 employees across the country. U.S. District Court Judge Vince Chhabria issued the order in San Francisco on October 13, 2026, while a legal challenge over the agency's use of congressional funding continues.

The ruling places affected office closures and employee transfers on hold, leaving the future of the USDA's Indianapolis hub uncertain. According to Food Safety Magazine, the court granted a stay after labor unions challenged the department's use of appropriated funds to carry out the reorganization.

Chhabria found substantial evidence that the department's plans departed from congressional expectations when lawmakers allocated the funds. The order prevents the USDA from closing affected offices or moving employees and their positions or functions outside their existing local commuting areas.

The judge wrote that there was "strong evidence that USDA’s planned reorganization activities deviate from Congress’s expectations at the time it appropriated the funds."

The order extends an administrative stay issued on September 14, which had suspended deadlines in reassignment notices sent to affected employees. Those notices generally instructed workers to report to new offices in September or October.

The court's restrictions do not prohibit transfers between offices within the Washington, D.C., region. Employees who had already moved before the September 14 administrative stay are also not required to return to their former duty stations.

In outlining the scope of the restrictions, the order bars the USDA from "closing or eliminating offices" at affected component agencies or "relocating or reassigning employees or their positions or functions to different and/or new locations outside the local commuting area, including by issuing or enforcing MDR letters or any other notice or directive of reassignment or relocation in whole or in part."

The dispute centers on whether the USDA improperly redirected congressional appropriations to finance its restructuring. Food Safety Magazine reported that the lawsuit argues the department unlawfully "reprogrammed" funds for office closures and employee relocations.

A coalition of federal employee unions, nonprofit organizations and local governments brought the legal challenge, arguing that Congress had established restrictions on the department's ability to reorganize under its fiscal 2026 spending legislation. The Department of Justice, representing the USDA, asked the judge to limit the stay to employees represented by the unions, but Chhabria rejected that request.

The judge explained that the most appropriate remedy was to "stay USDA’s reorganization expenditures, full stop."

He also wrote that allowing some employees to move while keeping others in existing offices would create unnecessary costs because the government would have to maintain two offices with separate groups of employees instead of one.

"It would be contrary to the public interest to require USDA to keep some employees in their current offices — preventing closure of those offices — while allowing the agency to move other employees to new offices, as this would require expenditure of congressionally appropriated funds on two offices with two sets of employees rather than one," Chhabria wrote.

The judge acknowledged that the congressional provision requiring committee approval for certain reorganization spending raised constitutional questions. Both parties agreed that the committee-approval language was unconstitutional, but the court concluded it could still temporarily halt activities that likely violated federal appropriations statutes.

Chhabria wrote that "Congress was actively working to restrict the agency’s ability" to use appropriated funds for the restructuring. He added that the court would proceed on the understanding that it could temporarily halt reorganization activities that likely violated those statutes.

The judge cautioned that the stay could be short-lived. Restrictions in the spending legislation are scheduled to expire on December 11, 2026, and the Trump administration is likely to appeal the ruling.

He noted that the USDA could present its restructuring plans to Congress, which could decide whether to extend the funding restrictions. Until then, the department remains barred from spending appropriated funds on the challenged office closures and employee relocations.

The ruling also addresses concerns about staffing losses and disruption to public services. Under the first Trump administration, USDA agencies experienced significant staff departures after hundreds of Washington-based employees were relocated to Kansas City, Missouri, under a smaller relocation initiative.

Chhabria cited union polling indicating that a majority of affected members would not relocate to retain their jobs. He said there was at least some risk that the proposed closures and transfers would weaken the ability of affected agencies to perform essential functions and disrupt programs relied on by Americans.

"Although it’s unclear how many employees USDA plans to actually relocate, if the relocations are allowed to proceed, it’s likely that many affected employees will decline to move and will instead leave," Chhabria wrote.

He also stated that "it does not appear USDA has conducted any analysis to show that these risks are not real or are outweighed by any potential benefits."

The judge emphasized that the case was not a determination of whether the reorganization itself would improve government efficiency. Instead, the immediate issue was whether the department could use the funds at issue to implement the changes while the legal challenge remained unresolved.

Elena Goldstein, legal director at Democracy Forward, one of the plaintiffs, said the ruling would preserve the department's ability to continue serving the public.

"The stay will allow the vital work of the department and its employees to continue, protecting the families and communities across the nation that rely on its vital work," Goldstein said.

The USDA was given two business days to notify employees of the preliminary stay's terms and publish the court's ruling on its reorganization plans.