WASHINGTON, D.C. (Bloomberg Law) — Federal agencies’ cancellation of their workers’ collective bargaining agreements compounds legal and financial hurdles for labor groups already struggling to respond to the Trump administration’s culling of the workforce.
President Donald Trump signed two executive orders last year ordering agencies to end union contracts for over 1 million federal workers citing national security concerns. While the unions have fiercely litigated the ensuing cancellations, labor observers say the groups face an uphill battle in the courts.
Without collective bargaining rights, unions will have a difficult time organizing new workers and maintaining dues revenue. In recent weeks, the Internal Revenue Service, the US Department of Energy, the Office of the Comptroller of the Currency, and others have dissolved their pacts.
While the future of the labor groups is increasingly uncertain, a Tea Party-era Wisconsin law could preview the stakes for unions if they’re unable to block the agencies’ actions.
The state’s Act 10 placed strict limits on collective bargaining for certain public-sector employees and, similar to the executive orders, ended payroll dues collections. Since it’s enactment, public sector union membership has plummeted by about 30%.
“Act 10 was really horrible for public sector unions in Wisconsin, and it’s easy to trace it to the big drop off in public sector unionization,” said Hayley Brown, a labor and disability researcher at the Center for Economic and Policy Research.
“I would argue that some of the proposals that I’ve seen from the Trump administration for federal workers actually go beyond that to just eliminating collective bargaining for vast swats of the federal workforce altogether,” she said.
Dues Collections
Without collective bargaining agreements, unions will likely have to expend more resources on manually collecting dues than they did when the contract was in place, attorneys said.
Agencies halted some automatic dues deductions shortly after the first executive order was signed in March 2025.
The American Federation of Government Employees said in a May 2025 court filing that at the time it had lost about $2.9 million in dues-related revenue per pay period since the government stopped payroll deductions. As a result, the union cut staff by nearly 60%, according to the filing.
Similarly, the National Treasury Employees Union said in a September complaint that the union received 94% of its dues revenue from payroll deductions.
While both AFGE and the NTEU have since implemented systems that allow members to pay dues directly to the unions, observers say the process requires significantly more time and resources.
“Unions are going to have to expend more resources to just sort of stay in place and to maintain the shops that they already have if they have to handle dues payment without any kind of coordination with the employers,” CEPR’s Brown said.
An AFGE spokesperson didn’t respond to a request for comment.
When Act 10 in Wisconsin outlawed direct dues deductions, the state effectively cut off public-sector unions’ resources, according to former Rep. Tom Davis (R-Va.), who chaired the House Oversight and Government Reform Committee where he studied the impact of public-sector unions on government operations.
“The dues checkoff was taken away, and all of a sudden you had to send a bill out each month, and all of a sudden collections go way down,” said Davis, now a partner at Holland and Knight specializing in congressional and regulatory affairs.
Grievances, Working Conditions
A lack of a collective bargaining agreements will also force unions to use more resources fighting basic employee grievances, said Ryan Nerney, managing partner at Tully Rinckey PLLC.
Without a contract “you’re taking away those administrative processes, which is far less expensive than filing something in federal court,” he said.
NTEU is still challenging federal worker grievances through their contract’s arbitration process, even when a CBA has been terminated, said Doreen Greenwald, NTEU national president.
“We have to exhaust the process,” Greenwald said, noting that the union has seen mixed results in getting agency officials to attend grievance meetings. “The courts eventually are part of that process, but we have not gotten to that stage.”
Unions have also lost some ability to negotiate over other employment conditions, including parental leave and overtime policies, according to a union official.
In Wisconsin, public-sector unions were barred from bargaining over working conditions and hours, and instead were only permitted to negotiate wage increases, which were capped at the rate of inflation.
That limit on negotiation power contributed to the groups’ membership decline, according to Laura Dresser, a clinical associate professor at the University of Wisconsin-Madison.
“There’s tens of thousands of management issues that unions deal with, and all of them were taken off the table,” Dresser said. The federal framework “feels even more devastating.”
