In a landmark decision that reverberated through the halls of power and the boardrooms of American businesses, the Supreme Court, in a flurry of late-term activity, overturned a nearly century-old precedent, ruling that the President possesses the authority to remove leaders of most independent agencies at will. This seismic shift, encapsulated in the case of Trump v. Slaughter, dismantles a structural safeguard that had long insulated these critical regulatory bodies from direct presidential control, raising profound questions about the future of agency rulemaking and, more critically, enforcement. Jennifer L. Gaskin, editorial director at Corporate Compliance Insights, delves into the immediate and potential long-term ramifications of this ruling for the companies these agencies oversee, highlighting the concerning implications for regulatory enforcement.
For almost a hundred years, a defining characteristic of agencies tasked with regulating American commerce was their structural independence. This independence was not merely a matter of policy but was embedded in their operational framework: the heads of these agencies could only be removed for demonstrated cause, not for ideological or policy disagreements with the White House. Bodies such as the Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), and the National Labor Relations Board (NLRB) were typically composed of bipartisan commissioners serving fixed, staggered terms. This arrangement ensured a degree of insulation from the immediate political winds, allowing for a more deliberative approach to rule-making and a less predictable enforcement landscape for businesses. A president who found himself at odds with the direction of these agencies often had to wait for the terms of opposing party members to expire, fostering a natural friction and a minority voice within these organizations that was not solely beholden to the Oval Office. Companies, in turn, could rely on a certain rhythm and predictability when adapting their compliance programs in response to new regulations or shifts in enforcement priorities.
On June 29, the Supreme Court’s 6-3 majority opinion in Trump v. Slaughter effectively dismantled this century-old equilibrium. The Court’s decision repudiated a foundational precedent, establishing that the President can now remove the leaders of most independent agencies without cause, thereby bringing these entities under direct White House influence. This raises the distinct possibility of increased politicization in the formulation of agency rules and the execution of enforcement actions. While the Federal Reserve was granted an exception due to its unique historical standing in a separate ruling (Trump v. Cook), the FTC, NLRB, SEC, and approximately two dozen other significant agencies were not afforded such protections.
The immediate consensus among legal observers, irrespective of their stance on the ruling’s broader merits, is that while the pace of rulemaking is unlikely to accelerate dramatically, enforcement is an entirely different matter. The critical questions revolve around which investigations will be initiated, which will be quietly closed, and where an agency will strategically deploy its finite resources.
Misha Tseytlin, a partner at Troutman Pepper Locke and a seasoned Supreme Court litigator, articulated the core concern: "With the threat of removal at any time hanging over folks’ heads, they’re much more likely to take direction from the White House in terms of the priorities and where they put their resources." This sentiment underscores the potential for a direct line of influence from the executive branch to the operational decisions of regulatory bodies.
The Shifting Sands of Predictability in Regulatory Enforcement
The prevailing sentiment among many legal analysts is that Slaughter will usher in an era of heightened uncertainty. This uncertainty is predicted to manifest as more pronounced swings in enforcement priorities from one presidential administration to the next. Agency policies may begin to lurch rather than drift, and in conjunction with the recent erosion of Chevron deference—the principle that courts should defer to agencies’ reasonable interpretations of the statutes they administer—this could trigger a fresh wave of litigation challenging the very scope of agency authority.
However, Tseytlin offers a contrasting perspective, suggesting that the ruling might, paradoxically, make agencies more predictable, or at least more transparent in their timing. He argues that previously, an independent agency’s stance would generally align with the President’s direction but on its own schedule, influenced by fixed terms and the presence of a protected minority. This meant that most agencies did not precisely mirror the White House’s immediate policy objectives. Under the new regime, an agency’s posture is expected to align directly with the President’s agenda, allowing companies to anticipate its actions much as they currently do with more overtly political agencies.
"It should almost make it more predictable, because now you can handicap what you expect," Tseytlin explained. "If you see whatever happens in November of a presidential year, you pretty much handicap how the NLRB is going to act, the same way you’re currently handicapping how EPA is going to act." He posits that the entire executive branch, under this new framework, will operate under a more unified rubric, moving as a single entity rather than two distinct forces.
Yet, this argument for increased predictability holds more weight for regulatory rules than for enforcement actions. Rulemaking processes, even with potential shifts in leadership, still involve established procedures such as notice-and-comment periods, judicial review, and often include phased implementation. This provides companies with months, if not years, to adapt their compliance strategies. Investigations, however, operate on a fundamentally different timeline. They announce themselves not through proposed regulations but through the issuance of subpoenas and other compulsory processes. The discretionary decisions regarding who to pursue and whom to grant leniency are often opaque and subject to limited judicial oversight.
A Glimpse into Enforcement Shifts: The EEOC as a Case Study
Recent actions by the Equal Employment Opportunity Commission (EEOC) provide a stark illustration of these potential enforcement shifts. Under the leadership of its Trump-appointed chair, Andrea Lucas, the agency has reportedly reoriented its enforcement efforts towards claims on behalf of white men. This has included opening an investigation into Nike’s diversity hiring goals, filing a lawsuit against a Coca-Cola bottler over a networking event specifically for female employees, and securing a $500,000 settlement from a Planned Parenthood affiliate concerning its diversity, equity, and inclusion (DEI) practices.
Former officials have described Chair Lucas as personally directing the agency’s caseload toward priorities aligned with the administration’s agenda to a degree they deem unprecedented for an EEOC chair. Reports have also surfaced indicating the existence of an internal "priority" case list, with selections reportedly influenced by the potential public attention they might garner. Concurrently, the agency has reportedly moved to drop cases it had been pursuing on behalf of transgender and nonbinary workers, seemingly in response to directives that prioritized specific outcomes. These developments, prior to the Slaughter decision, already foreshadowed the potential for a more politically driven approach to enforcement.
The Subtler Impact on Rulemaking and Dissent
Beyond the direct enforcement arena, the Slaughter decision carries subtler but significant implications for the rulemaking process. When a president can remove agency commissioners at will, the seats historically reserved for members of the opposing party may simply remain unfilled. This scenario is already playing out at the FTC, which has been operating with a narrow Republican majority, its Democratic seats remaining vacant following firings that contributed to the Slaughter litigation.
The absence of dissenting voices on agency commissions has a tangible impact on the development of regulations. Dissenting commissioners not only voice objections but also meticulously build a record of their concerns. These objections often become the bedrock for subsequent legal challenges to the rules. For instance, when the D.C. Circuit Court of Appeals struck down the SEC’s proxy-access rule in 2011, a key factor in its decision was the agency’s failure to adequately address cost-benefit concerns, precisely the points that the two dissenting commissioners had vigorously pressed. With fewer dissenting voices, rules may pass through the agency process more smoothly but may be left more vulnerable when they eventually face judicial scrutiny, particularly in a legal environment where judicial deference to agency interpretations is diminishing.
Navigating the New Regulatory Landscape
For corporate compliance teams, the prevailing legal commentary suggests that waiting to observe the full ramifications of the Slaughter decision is a precarious strategy. The consistent message is that compliance programs designed with a singular administration’s policy posture in mind are the most likely to be caught unprepared for shifts in regulatory direction.
The decision’s reach extends to commissioners, not just agency heads, as evidenced by the fact that the commissioners who were fired in the context of the Slaughter case were not necessarily the chairs of their respective agencies. Crucially, the ruling did not definitively settle the extent to which this removal power extends further down the agency hierarchy. The majority left open questions regarding the status of administrative law judges, career civil servants, and non-Article III judges. For the present, the most directly affected officials are the Senate-confirmed leaders at the top, rather than the career staff who handle the day-to-day operations. This unresolved boundary was a significant point of contention in the fiery dissent penned by Justice Sonia Sotomayor, who warned that the majority had exchanged a functional arrangement for a theoretical framework with no clear limits, one that "promises to unleash only chaos."
The Supreme Court majority in Slaughter frames its decision as an enhancement of accountability, ensuring that agencies are answerable, through the President, to the electorate. Regardless of its constitutional justifications, for the businesses subject to the oversight of these agencies, the practical implications are far-reaching. While the immediate overhaul of established rules is unlikely, the individuals within these agencies responsible for identifying and pursuing instances of corporate misconduct now serve unequivocally at the President’s pleasure. The most probable outcome is that the enforcement decisions made by agency personnel will increasingly align with the political objectives of the sitting President, ushering in a new and potentially more volatile chapter in corporate regulation.
