Elon Musk’s DOGE Dealt Two Legal Blows in 24 Hours

Elon Musk’s Department of Government Efficiency (DOGE) has suffered two major legal setbacks within 24 hours.

Why It Matters

President Donald Trump created DOGE in an executive order on his first day in office. The department, mandated by the U.S. electorate, is charged with “modernizing Federal technology and software to maximize governmental efficiency and productivity.” But the exact scope of DOGE’s power is still unclear.

DOGE has drawn sharp scrutiny for seeking unfettered access to the internal data of agencies across the government, including the Labor Department, U.S. Treasury, Office of Personnel Management, General Services Administration, Centers for Medicare & Medicaid Services, the Small Business Administration and more.

However, recent rulings could suggest that DOGE’s power will be kept in check by the courts during the next four years.

What To Know

A federal judge on Friday blocked an attempt to put 2,700 U.S. Agency for International Development (USAID) employees on paid leave and recall nearly all of those posted abroad.

The decision puts a roadblock in the way of Trump and Musk’s plan to dismantle the agency, as part of DOGE’s agenda to cut what it deems as wasteful government spending. The Trump administration had vowed to fire thousands of USAID employees and cut any foreign aid programs dedicated to DEI initiatives. Meanwhile, Elon Musk said during an X Spaces stream on Monday that Trump “agreed” with him that the agency should be shut down.

“I actually checked with him a few times. Said ‘Are you sure?’ Yes, so we’re shutting it down,” Musk said. But Democrats argue that shutting USAID down would be illegal, while the union representing USAID employees filed a lawsuit against the Trump administration.

On Thursday, a filing by the American Foreign Service Association and the American Federation of Government Employees asked the court to declare unlawful what they called “a series of unconstitutional and illegal actions taken by President Donald Trump and his administration that have systematically dismantled” USAID without authorization from Congress.

The plaintiffs in the case also said that the moves by Trump and Musk had “generated a global humanitarian crisis by abruptly halting the crucial work of USAID employees, grantees, and contractors.”

“They have cost thousands of American jobs. And they have imperiled U.S. national security interests,” they wrote.

U.S. District Judge Carl J. Nichols has now entered a temporary restraining order in the case, putting the Trump administration’s plans on hold. Nichols wrote that the firing of USAID employees would result in “physical harm.”

The Trump administration has made wildly inaccurate claims about USAID to support its drive to shut it down. One such claim occurred on Tuesday, when White House press secretary Karoline Leavitt criticized USAID for funding DEI initiatives abroad, including $1.5 million for workplace programs in Serbia, $70,000 for a DEI musical in Ireland, and $32,000 for a transgender comic book in Peru. She also cited $47,000 for a transgender opera in Colombia, though reports indicate only $25,000 came from a State Department program, with the rest from non-federal sources, according to NOTUS.

Only a small portion of USAID funding goes towards DEI initiatives. Much of USAID funding goes toward agencies like the World Food Program, UNICEF and nongovernmental agencies like Save the Children.

Nichols’ decision was not the only legal blow dealt to DOGE in the last 24 hours. U.S. District Judge Paul A. Engelmayer on Saturday blocked the department from accessing Treasury Department records that contain sensitive personal data such as Social Security and bank account numbers for millions of Americans.

The judge’s decision said Treasury records from the Bureau of Fiscal Services can only be accessed by specialized civil servants who need them for their jobs and bars the Trump administration from granting access to political appointees, special government employees, or those outside Treasury. The White House says Musk is classified as a special government employee.

Engelmayer’s decision also ordered Musk and his team to “immediately destroy any and all copies of material downloaded from the Treasury Department’s records and systems, if any.”

The preliminary injunction was issued after 19 Democratic attorneys general sued the Trump administration, alleging it allowed Musk’s team access to the Treasury Department’s central payment system, which handles tax refunds, Social Security benefits, veterans’ benefits and more, in violation of federal law. “Defendants’ new expanded access policy poses huge cybersecurity risks that put vast amounts of funding for the States and their residents in peril,” the lawsuit said. “All of the States’ residents whose [personally identifiable information] and sensitive financial information is stored in the payment files … are at risk of having that information compromised and used against them.”

The lawsuit was filed by the office of Letitia James, the New York attorney general.

She argued that the president does not have the power to give away Americans’ private information to anyone he chooses, and he cannot cut federal payments approved by Congress. The suit also accuses Treasury Secretary Scott Bessent of altering policy to let Musk’s DOGE team access sensitive financial and personal data in the department’s payment systems.

“This decision failed to account for legal obligations to protect such data and ignored the privacy expectations of federal fund recipients,” including states, veterans, retirees and taxpayers, the lawsuit says. The Treasury Department has said the review was about assessing the integrity of the system and that no changes were being made.

Separately, Democratic lawmakers are seeking a Treasury Department investigation of DOGE’s access to the government’s payment system.

But while DOGE has faced a number of legal setbacks, one judge ruled in the department’s favor this week. On Friday, U.S. District Judge John Bates in Washington, D.C. declined to block DOGE from accessing the U.S. Department of Labor’s systems.

The lawsuit, filed by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), alleged Musk could obtain sensitive information about investigations into his own companies and competitors by accessing government computer systems. The White House says Musk will recuse himself from conflicts of interest. As a special government employee, he follows some but not all federal ethics and conflict-of-interest rules.

Bates ruled that “although the Court harbors concerns about defendants’ alleged conduct,” the AFL-CIO had not shown it was harmed by the Labor Department’s actions.

AFL-CIO President Liz Shuler said in a statement that the decision was “a setback, but not a defeat,” and that the union would provide more evidence to support its claims

What People Are Saying

U.S. District Judge Carl J. Nichols wrote in a seven-page opinion: “No future lawsuit could undo the physical harm that might result if USAID employees are not informed of imminent security threats occurring in the countries to which they have relocated in the course of their service to the United States.”

“Administrative leave in Syria is not the same as administrative leave in Bethesda: simply being paid cannot change that fact,” he wrote.

Donald Trump wrote on Truth Social: “USAID IS DRIVING THE RADICAL LEFT CRAZY, AND THERE IS NOTHING THEY CAN DO ABOUT IT BECAUSE THE WAY IN WHICH THE MONEY HAS BEEN SPENT, SO MUCH OF IT FRAUDULENTLY, IS TOTALLY UNEXPLAINABLE. THE CORRUPTION IS AT LEVELS RARELY SEEN BEFORE. CLOSE IT DOWN!”

Letitia James, the New York attorney general, said of the Treasury Department case: “This unelected group, led by the world’s richest man, is not authorized to have this information, and they explicitly sought this unauthorized access to illegally block payments that millions of Americans rely on, payments for health care, childcare and other essential programs.”

What Happens Next

Nichols’ restraining order in the USAID case is in effect until Friday, February 14 at 11:59 p.m. Nichols scheduled a hearing on February 12.

Meanwhile, a hearing is also set for the Treasury Department case on February 14.