Independent No More? The Implications of the Trump Administration’s Actions on Independent Agencies
Client Alert | February 25, 2025
Gibson Dunn is closely monitoring regulatory developments and executive orders in this fast-paced environment for administrative law. Our lawyers are available to assist clients as they navigate the challenges and opportunities posed by the current, evolving legal landscape.
In just the first month of the new administration, President Trump has taken several actions to exercise Executive Branch control over “independent” agencies. Agencies generally have been considered “independent” from presidential control if a statute provides that the agency’s leader or leaders may be removed only for cause.[1] These include many powerful and important agencies, including the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), the Federal Communications Commission (FCC), National Labor Relations Board (NLRB), Federal Energy Regulatory Commission (FERC), Board of Governors of the Federal Reserve System, Equal Employment Opportunity Commission (EEOC), and many more.
In his recent Executive Order titled “Ensuring Accountability For All Agencies,” President Trump ordered all independent agencies to submit their major regulations for White House review and approval in the same manner that traditional Executive Branch agencies do, authorized the Office of Management and Budget (OMB) to review and adjust independent agencies’ use of funds to ensure consistency with the President’s policies, and ordered all Executive Branch officers and employees to adopt as “controlling” the interpretations of law advanced by the President and Attorney General. A number of President Trump’s other executive orders, including the order requiring each agency to establish its own Department of Government Efficiency (DOGE) Team and the order requiring review of all existing regulations, lack carveouts for independent agencies that past administrations have frequently included in similar directives. Separately, the acting Solicitor General has informed Congress that the Department of Justice will no longer defend the constitutionality of for-cause removal protections at certain agencies and will seek to limit or overturn Humphrey’s Executor—the Supreme Court decision upholding the independence of the 1930s version of the FTC. The acting Solicitor General also has stated that multiple layers of for-cause removal protections for administrative law judges are unconstitutional. President Trump has also fired agency leaders at the EEOC, NLRB, the Merit Systems Protection Board, and the Office of Special Counsel, though litigation is ongoing as to whether those terminations were lawful.
I. The President’s Historical Control Over Independent Agencies.
Since the Interstate Commerce Commission was established in the late 1800s and the FTC in 1914, Congress has protected some agency leaders from presidential removal on the theory that nonpolitical experts should be insulated from political pressure. Almost from the start, these limits on the President’s removal powers proved controversial, and in 1926 the Supreme Court ruled that the Constitution requires that the President be able to remove certain Executive Branch officials. Recent Supreme Court decisions have established only “two exceptions to the President’s unrestricted removal power.” The first exception applies to “multimember expert agencies that do not wield substantial executive power.” Notably, this exception tracks the Court’s 1935 decision in Humphrey’s Executor v. United States, which upheld removal protections for FTC commissioners because, as the 1935 Court framed it, the commissioners exercised primarily “quasi-judicial and quasi-legislative” functions. The second exception applies to “inferior officers with limited duties and no policymaking or administrative authority.”
The Court has rejected removal protections beyond these two exceptions, including double layers of protection for certain lower-level agency employees and removal protections for a single-member agency head. Today, independent agencies generally consist of multimember, partisan-balanced boards where statutes provide that leaders may be removed only for cause and not at the President’s pleasure.
The Trump Administration has taken an assertive view of the President’s removal powers and the corresponding power to control the entire Executive Branch, including independent agencies. It has asserted that a number of statutory removal protections for heads of independent agencies are unconstitutional because they wield substantial executive power and the President must be able to supervise all executive power. To the extent Humphrey’s Executor allows such removal protections, the Trump Administration has said that it will ask the Supreme Court to overrule that decision. Likewise, the Trump Administration has concluded that multiple layers of removal protections for administrative law judges (officials who preside over agency adjudications) are unconstitutional.
II. The Implications Of President Trump’s “Ensuring Accountability For All Agencies” Executive Order.
President Trump’s Order on “ensuring accountability” would subject independent agencies to significant political control across activities including rulemaking, legal interpretations, enforcement priorities, and expenditures. This Order has a number of implications that are discussed in turn below.
OIRA Review. The Order requires independent agencies to submit their major regulations to the Office of Information and Regulatory Affairs (OIRA) for review and approval in the same way traditional executive branch agencies have done for decades. OIRA is a division of OMB that reviews agency rules before they are issued to ensure the rules are consistent with principles of administrative law and consistent with the President’s policy priorities. While some independent agencies have informally and voluntarily cooperated with OIRA reviews in the past, this Order for the first time makes compliance with the OIRA process mandatory. The need to clear proposed and final rules through OIRA prior to publication could delay independent agencies’ ability to initiate and finalize rulemakings. As part of the review process, independent agencies will need to conduct a cost-benefit analysis under Executive Order 12866, which OIRA will review. By subjecting independent agencies’ economic analyses to OIRA review, the Order could improve the quality and consistency of the methodology underlying agencies’ estimates of the costs and benefits of their rules. In some instances, OIRA’s review could persuade agencies not to proceed with a planned rulemaking or could result in a White House directive that the rulemaking be halted.
Interpretation of Laws. The Order also provides that “[t]he President and the Attorney General . . . shall provide authoritative interpretations of law for the executive branch” and their “opinions on questions of law are controlling on all employees in the conduct of their official duties.” Further, no employee or officer “may advance an interpretation of the law as the position of the United States that contravenes the President or the Attorney General’s opinion on a matter of law, including but not limited to the issuance of regulations, guidance, and positions advanced in litigation, unless authorized to do so by the President or in writing by the Attorney General.”[2] Accordingly, when the President or Attorney General have provided an opinion or authoritative interpretation of any statute or regulation, the agency official generally may not advance a contrary interpretation of the law.
This is a meaningful limitation for independent agencies. President Trump has already advanced a number of legal interpretations through executive orders and memoranda, and traditionally, the Department of Justice (headed by the Attorney General) offers opinions on many legal issues. Although in the past independent agencies have often advanced their own legal interpretations in regulations and in litigation (at least until a case reached the Supreme Court, where the Solicitor General takes over)—sometimes in opposition to positions put forward by the Department of Justice—the Order requires them to adopt the views of the President and Attorney General moving forward.
Apportionment. The Order authorizes the Director of OMB to “review independent regulatory agencies’ obligations for consistency with the President’s policies and priorities” and to “adjust such agencies’ apportionments by activity, function, project, or object … to advance the President’s policies and priorities” including to “prohibit independent regulatory agencies from expending appropriations on particular activities, functions, projects, or objects, so long as such restrictions are consistent with law.”
This provision grants the Director of OMB control over independent agencies’ budgets, expenditures, and—to a significant extent—discretion. The “obligations,” “apportionments,” and “appropriations” are budgetary terms referring to various ways agencies are authorized to spend and do spend money. Notably, the Director’s authority to prohibit expenditures on certain activities could allow him to order nonenforcement of regulations or defunding programs that are inconsistent with the President’s policy preferences.
Exceptions for Monetary Policy and Other Legal Authorities. The Order exempts the Federal Reserve’s monetary policy from its scope. Accordingly, the Federal Reserve’s interest rate decisions will not be subject to OIRA review, though its banking regulatory functions are covered by the scope of the Order.
The Order also notes that it should not be read to affect “the authority granted by law to an executive department, agency, or the head thereof.”
Indirect Implications. The President’s assertion of Executive Branch control over independent agencies will have additional consequences not mentioned in the Order. As we previously noted, many of President Trump’s other executive orders do not include carve outs for independent agencies. Accordingly, the executive orders requiring cooperation with DOGE appear to apply to independent agencies. These orders include requirements to establish a DOGE team, share information with DOGE, engage in workforce-optimization efforts, and conduct comprehensive reviews of existing regulations and deregulation. In combination with the Order’s requirement that independent agencies follow the President’s interpretation of the law, independent agencies may also be required to adopt the President’s legal views as espoused in executive orders such as those that describe certain DEI and DEIA policies as illegal.[3]
Two of these orders may have particular significance for independent agencies:
- “Ensuring Lawful Governance And Implementing The President’s ‘Department Of Government Efficiency’ Deregulatory Initiative.” This order requires agencies to identify all regulations that are potentially unlawful and then develop a plan to rescind or modify them. Specifically, in coordination with OMB, DOGE, and the Attorney General, agencies have sixty days to identify all regulations that: (1) are “unconstitutional” or “raise serious constitutional difficulties;” (2) “are based on unlawful delegations of legislative power;” (3) contravene the “the best reading of the underlying statutory authority or prohibition;” (4) violate the major-questions doctrine; (5) “impose significant costs upon private parties that are not outweighed by public benefits;” (6) “significantly and unjustifiably” impede innovation; or (7) “impose undue burdens on small business and impede private enterprise and entrepreneurship.” The OIRA Administrator (who has not yet been designated) shall then consult with agency heads to develop a Unified Regulatory Agenda to rescind or modify these regulations.
- “Unleashing Prosperity Through Deregulation.” As we have previously discussed, this order requires that agencies identify at least ten existing regulations to repeal for every new regulation they promulgate, and it requires the total incremental cost of new regulations be “significantly less than zero.”
Because independent agencies have historically been exempt from similar deregulatory efforts, these orders could materially change the agencies’ longstanding regulatory processes.
III. Pending Litigation Regarding the President’s Control Over Independent Agencies.
The President’s assertion of control over independent agencies has already begun to attract legal challenges. These challenges could affect the practical consequences of the Order and of President Trump’s other actions regarding independent agencies. Currently, some of the most notable litigation has been brought by heads of independent agencies who were fired without an explanation or compliance with statutory notice requirements (e.g., without complying with a “for cause” removal restriction). For example:
- Dellinger v. Bessent, 1:25-cv-00385 (D.D.C. filed Feb. 10, 2025), is a case by the Special Counsel leading the Office of Special Counsel (which oversees various whistleblower and government accountability projects), whom President Trump fired without explanation. The District Court issued a temporary restraining order reinstating Dellinger as the Special Counsel, the D.C. Circuit dismissed an appeal/denied mandamus for lack of jurisdiction, and the Supreme Court held the government’s appeal in abeyance until the temporary restraining order expires on February 26.
- Wilcox v. Trump, No. 1:25-cv-00334 (D.D.C. filed Feb. 5, 2025), is a suit by a former Democratic member of the National Labor Relations Board whom President Trump fired without explanation. The case is currently before the U.S. District Court for the District of Columbia, and expedited summary judgment briefing is underway.
- Harris v. Bessent, No. 1:25-cv-00412 (D.D.C. filed Feb. 11, 2025), is a suit by the former chair of the Merit Systems Protection Board, whom President Trump demoted and subsequently fired without explanation. The U.S. District Court for the District of Columbia issued a temporary restraining order reinstating Harris as the Chair. The Trump Administration has appealed the case to the D.C. Circuit and/or the Supreme Court, where it would likely have the same fate as Dellinger. Meanwhile, the plaintiff moved for a preliminary injunction in the district court.
IV. Conclusion
Gibson Dunn is closely monitoring regulatory developments and executive orders in this fast-paced environment for administrative law. Our lawyers are available to assist clients as they navigate the challenges and opportunities posed by the current, evolving legal landscape.
[1] Congress sometimes labels agencies as “independent” without providing any removal protections. See Collins v. Yellen, 594 U.S. 220, 248–50 (2021).
[2] The Executive Order just refers to “employees,” but defines employees according to 5 U.S.C. § 2105, which includes officers.
[3] A federal district court recently granted a preliminary injunction enjoining some of these orders, so the efficacy of these orders may be subject to change.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Public Policy, Administrative Law & Regulatory, Energy Regulation & Litigation, Labor & Employment, or Government Contracts practice groups, or the following in Washington, D.C.:
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(+1 202.955.8256, mbopp@gibsondunn.com)
Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
(+1 202.955.8515, sdelery@gibsondunn.com)
Eugene Scalia – Co-Chair, Administrative Law & Regulatory Practice Group,
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Helgi C. Walker – Co-Chair, Administrative Law & Regulatory Practice Group,
(+1 202.887.3599, hwalker@gibsondunn.com)
Matt Gregory – Partner, Administrative Law & Regulatory Practice Group,
(+1 202.887.3635, mgregory@gibsondunn.com)
Andrew G.I. Kilberg – Partner, Administrative Law & Regulatory Practice Group,
(+1 202.887.3759, akilberg@gibsondunn.com)
Tory Lauterbach – Partner, Energy Regulation & Litigation Practice Group,
(+1 202.955.8519, tlauterbach@gibsondunn.com)
Amanda H. Neely – Of Counsel, Public Policy Practice Group,
(+1 202.777.9566, aneely@gibsondunn.com)
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