DC Circuit Reverses Reinstatement Of Agency Board Members

In a split decision, the D.C. Circuit Court of Appeals reversed the District Court and ruled that President Trump is not obligated for now to reinstate fired National Labor Relations Board and Merit Systems Protection Board members, undoing the District Court’s injunction. The District Court ordered Trump to reinstate the agency board members – Gwynne Wilcox of the NLRB and Cathy Harris of the MSPB – reasoning that his right to fire them was restricted by Congress and a 1935 Supreme Court decision in Humphrey's Executor v. U.S. On March 28, the Appeals Court explained that the law since 1935 has trended towards more presidential sway over independent agency officials, and therefore, President Trump is likely to succeed on the merits of the case.

In a detailed concurring opinion, Judge Walker noted that the Supreme Court, in cases such as Seila Law v. CFPB and Free Enterprise Fund v. PCAOB, has narrowed the Humphrey’s Executor restrictions on presidential authority to situations in which agencies do not wield "substantial executive power." By contrast, the NLRB and MSPB exercise substantial executive authority. The example provided is that the NLRB issues rules influencing federal labor law, decides significant cases, and seeks enforcement of its orders. Such control over federal labor policy requires that the agencies and their members be accountable to the executive branch, and by extension to the electorate.

The ruling tips the scale back in the President’s favor on his authority to remove heads of independent agencies, which is one part of his effort along with an Executive Order to bring independent agency decisions under White House control. It also neutralizes the two agencies for now, which only recently gained quorums through the District Court’s injunctions. Both agencies will operate at a more limited capacity until additional board members are appointed and confirmed, or until the substantive issue of executive control is resolved. The case goes back to the District Court for a decision on the merits.

Should you have any questions, please contact Partners Edward J. Bonett, Jr., Esq. at 908.546.6991 or via email here, Patrick W. McGovern, Esq. at 973.535.7129 or via email here, or any Partner in our firm’s Labor Law Practice Group.