A federal judge has ruled in favor of the Trump administration’s efforts to dismantle the United States Agency for International Development (USAID), allowing the termination of nearly 800 contractors in what marks a significant victory for the administration’s foreign aid overhaul.
U.S. District Judge Carl Nichols, a Trump appointee, determined that the affected contractors did not establish that their dismissals would result in irreparable harm. The ruling denied them emergency relief and upheld the administration’s ability to move forward with its restructuring of the agency.
The decision follows Nichols’ earlier ruling against a USAID employees’ union that sought to block the administration from terminating more than 2,000 direct-hire staff. He stated that any harm the contractors faced was “directly traceable” to contractual changes made by the government and suggested they pursue other legal avenues.
The Personal Services Contractor Association, an advocacy group representing U.S. personal services contractors, filed a lawsuit last month in an effort to shield contractors from termination. Attorneys for the group stated that notices had been issued to “possibly hundreds” of the approximately 1,110 contractors employed by USAID, nearly 46 percent of whom are stationed overseas, according to The Hill.
Carolyn Shapiro, a lawyer representing the contractors, warned that the agency’s dismantling was “now imminent” and argued that the administration’s approach to USAID violated structural constitutional protections.
The Trump administration’s efforts to overhaul USAID began earlier this year when the president ordered a full review of U.S. foreign aid programs, citing concerns that billions in taxpayer dollars were being spent on initiatives that did not align with American interests. His executive order temporarily froze nearly all aid programs, leading to significant disruption within the agency.
More than 50 senior USAID officials were placed on leave after allegedly working against the aid freeze, while hundreds of contractors faced furloughs or terminations. The agency’s security team was also sidelined after attempting to block access to Department of Government Efficiency (DOGE) investigators led by Elon Musk. The DOGE team was tasked with auditing USAID’s financial operations, and Musk publicly criticized the agency as a “criminal organization” in need of reform.
Following these developments, USAID’s official website was taken offline, and employees were reportedly denied entry to headquarters.
A previous federal court ruling temporarily blocked the aid freeze, but Chief Justice John Roberts later reinstated the suspension while the Supreme Court reviewed the matter.
Earlier this week, the Supreme Court ruled 5-4 against the Trump administration’s attempt to freeze nearly $2 billion in foreign aid payments. The decision affirmed a lower court’s order requiring USAID to disburse funds to contractors for work already completed. The ruling followed Trump’s executive order, which had paused foreign assistance for a 90-day review.
Shapiro urged the court to consider what she described as the broader, irreversible consequences of dismantling USAID, stating that once the agency was taken apart, it would be difficult to restore. She argued that denying the contractors’ request for relief could result in a “Humpty Dumpty”-like scenario where rebuilding the agency would be nearly impossible.
Judge Nichols, however, ruled that such concerns amounted to “generalized grievances” and did not meet the legal standard required to justify blocking the administration’s actions. With this ruling, the Trump administration’s efforts to restructure USAID and reduce its foreign aid footprint continue to move forward.
