SCOTUS: President may remove leaders of most "independent" executive branch agencies at will

Yesterday, the Supreme Court issued its opinion in Trump v. Slaughter. Under Article II, s. 1 of the Constitution, "The executive Power shall be vested in a President of the United States of America." The Court held that the executive power includes the President's authority to remove commissioners from the Federal Trade Commission (FTC) at will - despite the statute giving them seven year terms subject to removal only for "for inefficiency, neglect of duty, or malfeasance in office."

How does this impact employment law? The FTC itself touches on employment law, such as the ill-fated noncompete ban under the Biden administration. However, the Court's reasoning likely extends to other multi-member executive agencies, whose members enjoy similar statutory removal protections like the Equal Employment Opportunity Commission (EEOC) and National Labor Relations Board (NLRB) (but the Court seemed to carve out the Federal Reserve, or at least reserved judgment on the issue). 

Chief Justice Roberts

Although the governing statutes differ, they generally provide fixed, staggered terms for commissioners or board members and limit presidential removal to specified causes, such as inefficiency, neglect of duty, or malfeasance in office. The terms were generally staggered, so the effect would be that a new President would have to wait for the members to roll off year after year before appointing new members who ideologically align with the administration. 

The Court's decision will have two huge primary effects:

1. Instead of the President slowly filling positions with his own appointees as they roll off year after year, a new President may remove incumbent agency leaders without waiting for their terms to expire and replace them with appointees who reflect the administration's policy priorities. In short: the agencies may effectively flip as soon as a new President takes office. 

2. Presidential appointees are now directly accountable to the President. Fixed terms no longer provide meaningful insulation from presidential supervision. Even officials appointed by the President may be removed if they fail to carry out the administration's priorities. In short: agency leadership is likely to become more responsive to the President's policy agenda throughout an administration - not merely when a new administration takes office. 

For employers, the practical significance is that changes in presidential administrations are likely to produce much more rapid shifts in agency leadership - and, with them, shifts in enforcement priorities, rulemaking, litigation positions, and guidance from agencies such as the EEOC and NLRB.