Trump Attack on Independent Agencies Creates Confusion
ANALYSIS & COMMENTARY
President Donald Trump’s campaign to assert his presidential authority over the hiring and firing and daily management of independent federal agencies has created policymaking turmoil at the national level that is likely to be resolved only by the Supreme Court.
Among the agencies he is attempting to assert his management control over are the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board, Federal Trade Commission (FTC), the Merit Systems Protection Board (MSPB), the Surface Transportation Board (STB), and the Consumer Product Safety Commission (CPSC).
Some of these have been around for decades and were established by Congress with the intention of being able to operate at least somewhat independently from the hurly burly of day-to-day politics. The NLRB, for example, is led by five formal board members who are nominated by the President and approved by the Senate to serve staggered five-year terms.
That also is true of the board’s General Counsel, named by the President and approved by the Senate for a five-year term because in this case the official is not just the agency’s top lawyer, they also play a large role in shaping NLRB policy by directing nationwide enforcement efforts. Employers must adhere to the strictures laid down in general counsel guidance memos covering various topics of enforcement sent to regional attorneys or face expensive legal consequences.
In President Trump’s first term, the previous Obama-appointed NLRB general counsel stayed on for the first year of Trump’s presidency while serving out the remainder of his five-year tenure. Biden charted a different course, firing and removing from the NLRB premises the Trump appointed general counsel—who also had a year left of his term to serve—within 30 minutes of being sworn in as President in January 2021.
Although challenged in court by Republicans, this firing was quickly approved by a federal court, creating a legal precedent Democrats may have come to regret when Trump took office earlier this year and also quickly removed the Biden-appointed NLRB general counsel. Trump’s new leadership at the board then quickly issued an order reversing all of the policies that had been made by the Biden-appointed GC over the previous four years.
President Trump’s assertion of presidential authority extends far beyond the NLRB’s top lawyer to sitting board members and commissioners at other agencies as well. Lower courts have balked at some of these attempts and the issue is bound to eventually be determined by the U.S. Supreme Court, whose last decision upholding these agencies’ independent status dates back to 1935, in the depths of the Depression and the beginning of President Franklin Roosevelt’s New Deal.
In that particular case—which involved the FTC—the Supreme Court held that Congress can impose for-cause removal protections on multi-member boards of independent agencies without violating the separation of powers provision of the Constitution, according to attorney Peter Clouse of the law firm of Squire Patton Boggs.
In that 1935 decision, the High Court held that “the FTC’s board was designed to be non-partisan and act with impartiality; the FTC’s duties called for the trained judgment of experts informed by experience; and the commissioners’ staggered terms allowed for the accumulation of technical expertise while avoiding a wholesale change of leadership at any one time,” Clouse explains.
No Longer So Nonpartisan
Ninety years later, some of this characterization of these agencies seems almost quaint. Many of them have become highly partisan and political in recent decades, with the chairman and members of the President’s party—whether Democrat or Republican—a unashamedly committed to fulfilling the current administration’s policy platform, even when that calls for punitive enforcement actions against private sector businesses.
In the case of the FTC, as recently as last year Democrat Chairman Linda Khan committed the commission to enforce the Biden Administration’s ambitious labor agenda, in part by aggressively asserting that employers be prohibited from requiring employees sign non-compete agreements, and forging working alliances with federal agencies, including the Department of Justice, to advance other labor policy enforcement actions.
Of course, the FTC was never designed by Congress to deal with labor or employment law, but instead to enforce antitrust laws and preserve competition among private sector businesses. Khan’s argument in support of these actions was labor issues ultimately impact a business’s competitiveness.
(The non-compete ban came under legal challenge and last year was stayed by a federal appeals court. Since then, the Trump Administration has told the court that it will not pursue any further defense of the FTC policy. However, employers should remain aware that many states have enacted similar bans on non-compete agreements).
At the NLRB, one Democrat member who was dismissed by Trump was later reinstated by an appeals court, which days later saw that reinstatement order stayed by Supreme Court Chief Justice John Roberts pending a High Court decision in the case. As a result, the current board is limping along with only two members. The five-member body lacks a quorum, making it impossible for it to render policy decisions requiring a voting majority.
The same roundelay played out regarding Trump’s dismissal of a member of the Merit Systems Protection Board, which hears cases of federal employees who claim they were improperly removed from their jobs, and as such faces an enormous amount of work following the recent and ongoing gutting of major federal agencies and is expected to review an avalanche of government workers’ claims.
If the High Court upholds the President’s view that he can fire any independent agency board member at will, it is believed in some quarters that he would then choose to remove Jerome Powell as chairman of the Federal Reserve System, whose policies Trump blames for keeping interest rates unreasonably high.
In addition, there would be nothing to stop the next Administration, whether Democrat or Republican, from doing the same thing Trump has done as soon as the new President is sworn in, creating even more turmoil at top levels of the government as the hiring and firing process plays out.
At this point, what we are watching is President Trump engaging in a wholesale attempt to reshape the entire federal government to his liking. These efforts extend far beyond Elon Musk’s and several cabinet officers’ swift and messy slashing of several agencies’ workforces, which has captured the bulk of media attention so far.
Trump also has targeted unions that represent federal government workers, which over the years have pumped tens of millions of dollars into the Democrat Party coffers. He has done so by tearing up their collective bargaining agreements. He has accepted the argument that it is unreasonable and improper for government workers to collectively bargain with the very politicians their unions make political contributions to (ironically, this view was once held by Democrat President Franklin Roosevelt).
Once again, it remains to be seen if the Supreme Court will support this action—assuming that some lower courts won’t choose to go along.
