The D.C. Circuit Court of Appeals said in a 2-to-1 ruling that President Trump acted lawfully in firing two members of independent agencies, despite federal laws that hold they can only be fired for cause, because they wield significant executive power.
The ruling comes as the Supreme Court prepares to hear arguments in a similar case on Monday.
The case decided by the appeals court was brought by Cathy Harris, a Democratic member of the Merit Systems Protection Board, and Gwynne Wilcox, a Democratic member of the National Labor Relations Board. Trump fired both within weeks of taking office but did not cite any permissible reason, such as neglect of duty or malfeasance in office.
The MSPB hears federal employees' appeals of personnel actions taken by the government. The NLRB hears appeals of cases involving unfair labor practices and oversees union elections, among other duties. Both have multiple members appointed by the president and confirmed by the Senate, who serve staggered terms.
Initially, lower courts ordered the two officials reinstated, citing a 1935 Supreme Court decision known as Humphrey's Executor. In that unanimous decision, the court held that while the president has the power to remove purely executive officers for any reason, that unlimited power does not extend to agencies whose duties "are neither political nor executive, but predominantly quasi-judicial and quasi-legislative."
The Trump administration appealed, and in May, the Supreme Court weighed in with an emergency order allowing the firings of Harris and Wilcox to stand pending a merits hearing in their combined case.
"The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power," the Supreme Court majority wrote in the unsigned order.
On Friday, the D.C. Circuit fulfilled that prediction. In the majority opinion, U.S. Circuit Court Judge Gregory Katsas, a Trump appointee, cited the substantive rulemaking powers of the MSPB and the NLRB, as well the agencies' broad powers to order things like reinstatement and back pay.
Katsas declined to address whether the president can still fire officers at agencies that are "purely adjudicatory" in nature, nor did he wade into the thorny question of whether members of the Federal Reserve should remain insulated from the president's reach.
The dissent came from U.S. Circuit Court Judge Florence Pan, a Biden appointee. She argued that the MSPB and the NLRB do not in fact wield substantial executive power, and she warned of the consequences of granting the president control over such bodies.
"We may soon be living in a world in which every hiring decision and action by any government agency will be influenced by politics, with little regard for subject-matter expertise, the public good, and merit-based decision-making," she wrote.
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