A federal judge on Friday refused to block Elon Musk’s government cost-cutting department from accessing the U.S. Department of Labor’s systems, delivering an early setback to government employee unions resisting his push to shrink the federal workforce.
The temporary ruling by U.S. District Judge John Bates in Washington, D.C., marks the first step in a legal battle between the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Labor Department.
The union argues that Musk’s oversight could allow him to obtain sensitive information about ongoing investigations into his own companies and potential competitors by gaining access to government systems.
However, Judge Bates ruled that the AFL-CIO had not yet demonstrated direct harm caused by the Labor Department’s actions, though he acknowledged concerns about how Musk and his team may be using the data.
AFL-CIO President Liz Shuler described the decision as “a setback, but not a defeat”, vowing that the union would present more evidence to bolster its case.
A Labor Department spokesperson did not immediately respond to requests for comment late on Friday.
President Donald Trump has appointed Musk, the world’s richest person and CEO of Tesla and SpaceX, to lead the newly established Department of Government Efficiency (DOGE).
Musk’s mission is to root out fraud and waste across federal agencies, but his efforts have drawn widespread criticism from lawmakers and advocacy groups, who accuse him of overstepping his authority and attempting to dismantle critical government programs.
Critics also argue that Musk’s aggressive downsizing efforts could lead to mass layoffs of federal employees and the erosion of key government functions.
In a related case, another group of federal employee unions and retirees has sued the U.S. Treasury Department, arguing that it illegally transmitted sensitive payment records to Musk’s DOGE team.
In response to the lawsuit, the Treasury Department temporarily halted access to the data on Wednesday, pending further legal proceedings.
As Musk’s government restructuring efforts continue, the legal challenges against him are expected to escalate, potentially shaping the future of Trump’s federal cost-cutting agenda.
