Supreme Court gifts Trump with power to sack independent labor regulators, for now

WASHINGTON (CN) — At odds with 90 years of precedent, the Supreme Court ruled Thursday that President Donald Trump can terminate independent officials atop the National Labor Relations Board and the Merit Systems Protection Board.

Dividing along ideological lines, the conservative justices said that Trump will likely win a legal battle to show that both independent board members exercise executive power. Trump faces a greater risk of harm by reinstating the officials, the majority said, than the board members do from their terminations.

“Because the Constitution vests the executive power in the president, he may remove without cause executive officers who exercise that power on his behalf, subject to narrow exceptions recognized by our precedents,” the majority wrote.

Joined by her two liberal colleagues, Justice Elena Kagan, a Barack Obama appointee, wrote in dissent, accusing the majority of violating the high court’s rules and precedents to hand Trump a win.

“Today’s order, however, favors the president over our precedent; and it does so unrestrained by the rules of briefing and argument — and the passage of time — needed to discipline our decision-making,” Kagan wrote.

Trump filed an emergency appeal to block the reinstatement of board members Cathy Harris and Gwynne Wilcox, whom he fired for acting against the administration’s policy preferences. The D.C. Circuit reinstated both board members based on 90 years of precedent that prevents political interference in regulatory decisions.

Under the Supreme Court’s landmark ruling Humphrey’s Executor v. United States , presidents can’t terminate independent board members at will. The president appoints board members, who the Senate confirms. Members then maintain for-cause removal protections, creating limited circumstances for their termination, such as misconduct.

Trump, however, claimed that presidents need unrestricted removal power over the executive branch, embracing a broader version of Article II called the unitary executive theory.

“The president should not be forced to delegate his executive power to agency heads who are demonstrably at odds with the administration’s policy objectives for a single day — much less for the months that it would likely take for the courts to resolve this litigation,” U.S. Solicitor General John Sauer wrote.

Harris chaired the Merit Systems Protection Board, which reviews federal workers’ disputes, before Trump fired her in an email in February. Wilcox was the first Black woman to serve on and chair the National Labor Relations Board, which resolves unfair labor practice cases, before she was similarly terminated via email in January.

Both board members sued Trump and other administration officials for violating their statutory tenure protections. Harris and Wilcox warned the justices that throwing out these protections would have vast consequences for the federal government.

“If everyone who sits within Article II must be removable at will under the Vesting and Take Care Clauses, then every independent agency and neutral adjudicator lives underneath ‘the Damocles’ sword of removal,’” the board members wrote.

The Justice Department argued the justices should be more concerned with Trump’s ability to govern the executive branch. Although his administration said it believed that Humphrey’s Executo r had been narrowed into oblivion, Trump said he would ask to overturn the ruling in a merits appeal.

“To the extent Humphrey’s Executor  requires upholding tenure protections for agencies such as the NLRB and MSPB, the government intends to ask this Court to hold, after receiving full briefing and argument, that Humphrey’s Executor  was wrongly decided, is not entitled to stare decisis effect and should be overruled,” Sauer said.

The government asked the justices to take the rare step of treating his appeal as a formal request for Supreme Court review, known as a petition for certiorari, before judgment.

The high court refused to grant cert before judgment, allowing the case to continue in the lower courts before the justices conduct a merits briefing on the case.

While allowing Trump to remove the regulators and suggesting that Trump will likely prevail on his arguments, the majority says it was not deciding whether the NLRB or MSPB falls under executive authority.

‘A stay is appropriate to avoid the disruptive effect of the repeated removal and reinstatement of officers during the pendency of this litigation,” the majority wrote.

By firing regulatory board members because of his disagreement with Humphrey’s , Kagan said Trump had taken the law into his own hands. Kagan said no president since the 1950s has removed independent agency officers without cause, but the high court effectively blessed Trump’s move to do so.

“It should go without saying that the president must likewise follow existing precedent, however strong he thinks the arguments against it — unless and until he convinces us to reject what we previously held,” Kagan wrote.

Kagan lambasted her colleagues for allowing Trump to overrule nearly a century of precedent by fiat on the emergency docket.

“It is one thing to grant relief in that way when doing so vindicates established legal rights, which somehow the courts below have disregarded,” Kagan wrote. “It is a wholly different thing to skip the usual appellate process when issuing an order that itself changes the law.”

Harris and Wilcox said Trump could fire members of the National Transportation Security Board if they refused to cover up the cause of an accident or tax court judges who decline to give tax breaks to political allies.

“The threat of removal will undermine both actual impartiality and the appearance of it that are critical for the public to have faith in these foundational institutions,” the board members wrote. “There is a reason no President has attempted to exert this kind of naked authority: The corrosive effects are vast and disturbing.”

The administration of the Federal Reserve, which sets monetary policy and regulates banks, could be impacted under Trump’s arguments, Harris and Wilcox said.

“Under the Solicitor General’s remarkable view, therefore, all that stands between the firing of Jerome Powell and the Constitution is a cashier’s check that would have to be cut for his backpay,” the board members wrote.

Two days after that filing, Trump mirrored the board members’ hypothetical scenario by calling to end Powell’s tenure for not cutting interest rates.The president referred to the chair of the Federal Reserve as “‘Too Late’ Jerome Powell,” suggesting that the Fed’s actions did not match economic markers.

“Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS,” Trump wrote in a Truth Social post April 17. “Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”

The high court distinguished the regulatory board heads from the Federal Reserve, seemingly excluding the banking regulator from its order. The majority noted that the arguments on one do not necessarily implicate the constitutionality of for-cause removal protections for the other.

“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the majority wrote.

Kagan said she was glad to hear that the majority wanted to avoid imperiling the Fed, but that doing so created a puzzle because its independence rests on the same constitutional foundation as the NLRB and MSPB.

“Because one way of making new law on the emergency docket (the deprecation of Humphrey’s ) turns out to require yet another (the creation of a bespoke Federal Reserve exception),” Kagan wrote. “If the idea is to reassure the markets, a simpler — and more judicial — approach would have been to deny the president’s application for a stay on the continued authority of Humphrey’s .”

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