Assistant Attorney General Harmeet Dhillon wrote that the matter has been referred to the Equal Employment Opportunity Commission.
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The decision, seen as a win for central bank independence, sends the fight over removal back to the lower courts.
Doctors have been locked in a three-year dispute with the government, resulting in several rounds of strikes.
Williams was MP for Montgomeryshire and an aide to then-Prime Minister Rishi Sunak before the 2024 election.
Jannik Sinner survives an almighty scare as he begins his Wimbledon title defence with a five-set comeback victory over Miomir Kecmanovic on Centre Court.
The beloved actress was known for roles in classic TV sitcoms The Good Life and To the Manor Born.