Podcast - The Impact of the Supreme Court's Decision in Trump v. Slaughter

Anthony DiResta: Welcome to another podcast of Clearly Conspicuous. As we've noted in previous sessions, our goal in these podcasts is to make you succeed in this current regulatory environment, make you aware of what's going on with the federal and state consumer protection agencies and give you practical tips for success. As always, it's a privilege to be with you today.

Today we discuss Trump v. Slaughter, an important Supreme Court decision, and its implications. So here is an overview. The U.S. Supreme Court on June 29 held in Trump v. Slaughter that the for-cause removal protections for the Federal Trade Commission (FTC) commissioners and similar independent agency members violate the separation of powers, overturning 91 years of settled precedent and fundamentally alter[ing] how every independent agency operates. The 6-3 decision overruled Humphrey's Executor v. United States, a decision in 1939, which for nine decades prevented presidents from removing FTC commissioners without statutory cause. In a companion decision – Trump v. Cook – the court preserved limited removal protections for the Federal Reserve governors, creating a narrow but significant carve-out for central banking.

For more than 90 years, Humphrey's Executor v. United States (1935) insulated members of independent agencies, most prominently the FTC, from at‑will presidential removal, permitting termination only for "inefficiency, neglect of duty, or malfeasance." That framework gave businesses a crucial assumption that regulatory priorities at independent agencies would remain relatively stable regardless of which party controlled the White House. However, the U.S. Supreme Court just dismantled that assumption in Trump v. Slaughter, eliminating for-cause removal protections for commissioners at the FTC, National Labor Relations Board (NLRB), Consumer Product Safety Commission (CPSC), Merit Systems Protection Board, Equal Employment Opportunity Commission (EEOC), Federal Communications Commission (FCC) and other independent agencies. Far-reaching implications, right?

The ruling represents a decisive victory for proponents of the unitary executive theory, the principle that the president must have complete control over the executive branch. For regulated businesses, the practical consequence is immediate: Agency leaders now serve at the president's discretion, enforcement priorities can shift overnight with new appointments, and the traditional expectation of regulatory continuity at independent agencies is gone.

Justice Neil Gorsuch's concurrence signals that further challenges to the scope of agency power are forthcoming, meaning companies may soon have a new constitutional tool to challenge enforcement actions but will also face a less predictable regulatory landscape in which to operate.

Breaking Down What the Court Decided

The facts are straightforward and underscore how directly this decision empowers future administrations. President Trump removed former FTC Commissioner Rebecca Slaughter in March of 2025, stating only that her service was "inconsistent" with administration policies, without citing any statutory basis such as inefficiency, neglect of duty or malfeasance, which is provided in federal law. Slaughter sued, and the district court ordered her reinstatement under Humphrey's Executor. The Supreme Court, though, reversed.

Writing for a 6-3 majority, Chief Justice Roberts held that the U.S. Constitution vests executive power in the president alone and that the ability to remove principal officers at will is "essential" to that authority. The for-cause removal protections in the FTC Act and similar statutes, the court concluded, impermissibly shield officers exercising broad enforcement, litigation and policymaking functions from presidential supervision. As the Chief Justice framed it, "[T]o remain accountable to the President, those officers must be removable by the President."

Justice Gorsuch's concurrence warrants particular attention from general counsels here. He cautioned that because Humphrey's Executor allowed the U.S. Congress to insulate agencies from presidential control, Congress responded by delegating "vast legislative and judicial powers" to those agencies. Now that presidential control has been restored, Gorsuch urged the court to "finish the journey" by returning those legislative and judicial powers to Congress and to the courts. This signals that structural challenges to agency rulemaking and adjudicatory authority, including arguments that agencies have exceeded their constitutional mandate, will gain significant traction in the years ahead.

Justice Sotomayor's dissent warned, though, that the decision reshapes our government by transforming "dozens of independent commissions" into "purely executive agencies, shifting tremendous power over broad swaths of American life into the president's hands."

Whether one agrees with the majority or dissent, the practical reality is undeniable, folks. The institutional architecture that supported regulatory stability for nearly a century has been dismantled. The Slaughter decision does not exist in isolation, though. Decided the same day, Trump v. Cook addressed the president's attempt to remove a Federal Reserve (Fed) governor, and the court blocked that removal, preserving the Fed's unique independence. Together, these decisions create a new constitutional map: Most independent agencies now have lost their structural insulation, but the Fed, for now, retains its protected status.

Assessing the Effects for Specific Federal Agencies

Obviously for the FTC, at the center of the Slaughter litigation, the FTC faces the most immediate impact. For example, antitrust enforcement priorities, consumer protection initiatives and merger review processes may shift significantly with changes in administration.

Then there's the NLRB. Labor relations policies, including union election procedures, joint employer standards and unfair labor practice enforcement are now subject to more rapid shifts.

There's the Securities and Exchange Commission (SEC). Though SEC commissioners have historically enjoyed some removal protections, the Slaughter decision calls those protections now into question.

There's the FCC. Telecommunications, media and technology companies regulated by the FCC should expect that spectrum allocation, net neutrality, content moderation oversight and broadband policies may be subject to more significant swings between administrations.

There's the EEOC. Employers should expect that workplace discrimination enforcement priorities, guidance on emerging issues and litigation strategies may shift more rapidly with administration changes.

There's the Consumer Product Safety Commission, the Nuclear Regulatory Commission.

So you can see, many agencies are going to be impacted by this decision. So the operational reality is stark. Agency leaders responsible for enforcement, rulemaking and industry oversight now serve at the pleasure of the president. Divergence from White House priorities can result in immediate removal. For businesses, this means that the regulatory posture of an agency can change not just with a new administration, but midterm, [or] whenever a president decides to replace commissioners who are not aligned with current policy objectives.

Practical Implications

General counsels and chief compliance officers should treat Slaughter not as an abstract constitutional development but as a triggering event requiring immediate operational review. The assumptions underlying most compliance architectures at regulated companies, particularly those subject to the FTC, SEC, NLRB or FCC oversight, have materially changed.

There are more pronounced policy swings. So with agency leadership now subject to at-will removal, businesses should expect more dramatic and rapid shifts in regulatory enforcement priorities, rulemaking and interpretive positions between and even within administrations. There's going to be reduced predictability in capital allocation. There's going to be impending matters that will be impacted. For example, companies with pending enforcement actions, investigations or rulemakings before independent agencies should now be aware that leadership changes could affect the disposition of those matters. A change in commission composition may lead to shifts in settlement posture, enforcement theories or rulemaking.

And now there's even new constitutional defense tools. Justice Gorsuch's concurrence is not merely academic. It is a road map for future litigation. He urged the court to "finish the journey" by restoring legislative and judicial powers to Congress and the courts. So companies facing agency enforcement now have stronger arguments that the agencies are exercising powers way beyond their constitutional mandate. Then there's litigation and settlement strategy recalibration. Entities engaged in proceedings before independent agencies should immediately evaluate whether current leadership's enforcement posture is likely to survive the next transition or even the next few months.

Immediate Action Items

Consider taking the following steps now:

• Assess regulatory exposure. Identify all matters that are pending before independent agencies and evaluate whether leadership changes could affect their trajectory.
• Monitor agency leadership. Track nominations, confirmations and removals at key agencies.
• Stress-test compliance programs. So review governance and compliance programs against a range of regulatory scenarios, not just current enforcement priorities.
• Evaluate rulemaking participation. Consider whether to engage more actively in agency rulemakings now that could be vulnerable to reversal or modification under future leadership.
• Evaluate constitutional defense For companies facing enforcement actions or investigations, assess whether structural challenges to agency authority are now viable. Given Justice Gorsuch's concurrence, and the court's recent decisions in Loper Bright and West Virginia v. EPA, they collectively provide multiple avenues to challenge the constitutional basis of agency action.
• Plan for political transition periods. So develop strategies for managing regulatory risk during presidential transitions when removals, appointments and policy directives may occur rapidly.
• Engage in experienced regulatory counsel. The intersection of constitutional law, administrative procedure and industry-specific regulation requires counsel who can navigate all three dimensions simultaneously.

Key Takeaways

The Supreme Court's decision in Trump v. Slaughter is not merely a constitutional law development. It is a structural change to how American business is regulated. The 91-year-old framework that allowed general counsel and legal departments to build compliance programs on assumptions of regulatory stability is gone. In its place is a system in which every independent agency is, in a practical effect, an arm of the sitting president's policy agenda. Companies that act now to reassure their regulatory exposure, recalibrate their compliance framework and develop proactive engagement strategies will be best positioned to navigate this transformed landscape.

So folks, stay tuned to further programs as we identify and address the key issues and developments and provide strategies for success. I wish you continued success and a meaningful day. Thank you very much.