By Daniel Wiessner

June 29 (Reuters) - A U.S. judge has denied a request by unions to block potential job cuts at the Federal Emergency Management Agency, saying the agency had backed away from plans to let thousands of disaster-response workers' contracts lapse.

U.S. District Judge Susan Illston in San Francisco late on Friday said FEMA's offer to rehire workers whose contracts had already lapsed and allow current workers to renew their contracts for up to a year had mooted the unions' request for an order preserving the jobs while the case proceeds.

"While the facts on the ground are in flux, and plaintiffs’ concerns are well founded, it appears undisputed that any blanket policy of not renewing employees is not currently in effect," Illston wrote.

The judge in a separate order on Friday denied FEMA's motion to dismiss the case, rejecting the agency's argument that the unions must bring their claims to a federal labor board that hears challenges to job cuts.

FEMA, the U.S. Justice Department and the American Federation of Government Employees, the largest U.S. federal worker union and a plaintiff in the case, did not immediately respond to requests for comment.

FEMA, a part of the U.S. Department of Homeland Security, had planned not to extend the temporary contracts of thousands of workers and on-call reservists who respond to disasters, according to court filings. About 65 workers were notified on December 31 that their contracts would not be extended and hundreds more were set to follow each month.

The unions, in January, amended a lawsuit they had filed last year that more broadly challenged mass layoffs initiated by President Donald Trump's administration. The unions say the planned cuts at FEMA are unlawful because they would undermine its core disaster‑response mission, were not approved by Congress, and were ordered by former Homeland Security Secretary Kristi Noem rather than initiated within the agency.

The Trump administration has argued that FEMA has considerable flexibility to decide proper staffing levels. Trump, a Republican, has suggested in the past that FEMA should be abolished and that states should be responsible for their emergency preparedness. Trump last year created a council to review the agency's operations.

The case is American Federation of Government Employees v. Trump, U.S. District Court for the Northern District of California, No. 3:25-cv-03698.

For the plaintiffs: Danielle Leonard and others from Altshuler Berzon; Elena Goldstein and others from Democracy Forward Foundation

For the government: Robert Bombard, Andrew Bernie and others from the U.S. Department of Justice

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