The Slow Death of Effective Government
With the apparent demise of Humphrey’s Executor, what comes next for the civil service?
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In February, I wrote “The Execution of Humphrey’s Executor,” which predicted that the Trump administration would end “for cause” protection of the independent agency commissioners who run agencies like the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the National Labor Relations Board (NLRB). Humphrey’s Executor v. United States was a Supreme Court decision from 1935 that gave Congress the authority to protect certain policymaking positions in executive agencies from the president’s arbitrary power to fire them. Republican proponents of the “unitary executive” theory have long hoped to overturn Humprey’s. In my piece, I highlighted the administration’s effort to fire NLRB Commissioner Gwynne Wilcox as the case that would probably decide Humphrey’s fate.
In the Supreme Court’s May 22 Trump v. Wilcox decision, the execution took place—or so it seems. I make this qualification because of the context in which the Court acted and what it had to leave open.
The case granted President Trump’s application for a stay of a lower court order that found Commissioner Wilcox and Cathy Harris (commissioner of the Merit Systems Protection Board) to be protected from removal without cause pending a final SCOTUS ruling on Humphrey’s. Thus Wilcox and Harris can now be removed from office, even though a full hearing on the merits will be at least a year away. The Court decided the case on its controversial “shadow docket” without briefing or oral arguments, so the unsigned majority opinion is an unusually succinct two pages.
It is Justice Kagan’s dissent (joined by Justices Sotomayor and Jackson) that deserves our attention. Justice Kagan is having none of it. If Humphrey’s is still the law, she argues, how can the Court not follow it as the lower courts did? This is only a request for emergency relief, after all, not a decision on the merits, “[y]et here the President fired the NLRB and MSPB Commissioners in the teeth of Humphrey’s, betting that this Court would acquiesce. And the majority today obliges—without so much as mentioning Humphrey’s.” Justice Kagan also shows that the interests at stake are not just those of the commissioners themselves, but of Congress as well, since the Court is effectively declaring unconstitutional the elaborate “for cause” statutory arrangement that Congress mandated over 90 years ago.
In these circumstances, it is surprising that she dissented “respectfully”.
Humphrey’s Now Has a Zombie-Like Existence
The logic of the May 22 order is highly questionable. The independence of NLRB or MSPB commissioners may not matter to the conservative Court majority, but the idea of independence troubles them when it is applied to another body: the Federal Reserve Board. Wilcox and Harris argued that if they could be fired without cause, the same would have to apply to top officials at the Fed. The Court disagreed.
In fact, the Fed’s situation is one reason why Humphrey’s has survived so long.
The statutory framework of “for cause” removal is similar to that of the Federal Trade Commission (William E. Humphrey’s agency in the original decision), and a convincing carve-out that applies to the Fed but not the FTC is hard to write. When asked whether he would resign if President Trump asked him to, Chairman Jerome Powell said “no” because his removal without cause “is not permitted under the law.” That law is still there so long as Humphrey’s survives, unless the Court can explain why the Fed is different. The reason the Fed is being treated differently is, of course, related to politics and not to law. The president knows how badly the markets will react if he fires Powell: much worse than when he announced his tariffs. So Powell is going nowhere until his term ends in 2026 and the Court understands as well the need to preserve his and the Fed’s independence. It tried to do just that in its two-page opinion.
It is worth speculating about why Congress thought agency independence was a good idea in the first place. Back when these agencies were created, Congress was of the view that presidential power under Article II of the Constitution does not require absolute obedience from all officers and employees. There are good reasons to give them freedom to act independently, subject of course to removal for cause. Market activities like setting interest rates is a highly technical undertaking, which is why the Fed has an Open Market Committee to decide these matters, staffed with many talented economists and managers to support them. Congress knew this over 100 years ago when it set up the Federal Reserve Board, and it surely knows it now. But independence also has value in the other agencies which are set up collegially on a bi-partisan basis to deliver objective analysis. The NLRB must mediate labor-management relations and the Merit System Protection Board must decide whether government employees have violated civil service regulations. Other agencies can make the same case, like the Nuclear Regulatory Commission or the Federal Energy Regulatory Commission, which are charged with securing safe and reliable energy production. These are technical assignments and independence protects the expertise that is required to fulfill them. Or so Congress, an equal branch of government, once concluded.
Wresting the Fed from Humphrey’s Clutches
Now let’s turn to the Court’s rationale for distinguishing the Fed from other multi-headed agencies. The Court spent almost half of its decision trying to extricate itself from the Humphrey’s predicament. Surely aware of the market implications of a broad repudiation of Humphrey’s, the majority struggled to separate the situations. The result was the following sentence: “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.” Unfortunately, the Court is wrong on all three claims. The FRB is not unique, it is a multi-member commission like the FTC; it is not quasi-private (like Amtrak) but a government agency; and it is not a bank, but a regulator of banks. So where are we? Again, Justice Kagan nails it: We are present at “the creation of a bespoke Federal Reserve exception.”
When this case is finally heard on the merits next year, Humphrey’s will be back and the Court may have to say, with Mark Twain, that its death has been much exaggerated. One way the Court might be able to distinguish the Fed from other agencies would be to limit removal protections to quasi-judicial agencies under Wiener v. United States, a proposition I mentioned in my previous article. But with this Court’s fixation on putting Humphrey’s under the ground, it may have to bury it twice.
Why Does Executive Power Have to Be So Extreme?
This fight over “for cause” removal need not have happened. Any sensible view of executive power under Article II of the Constitution would acknowledge that the “Take Care Clause” imposes both a power and a duty on the president. The power is to order government officials to do what the president wants and the duty is to follow what the Congress decrees. And in this case Congress’ requirement is not onerous: just show cause before removing agency officials. Amazingly, the “for cause” statutes have never been invoked. President Roosevelt didn’t do so in Humphey’s case, and President Trump didn’t do so in his many removals of agency commissioners and other covered officials. By asserting cause, the president can still remove officials, as Trump v. Wilcox has shown us. So all that is at stake is a claim for back pay.
Moreover, what is “cause” anyway? It is traditionally considered to be misuse of office, but could include maladministration, which a president could easily assert. Why does this offend a sensible unitary executive theory? Elena Kagan understood this. After she left the Clinton White House she wrote an article defending executive control of the bureaucracy that was quite controversial at the time. She argued for presidential power to control the agencies, even the independent ones like the FTC. It never occurred to her (or those of us writing on this subject at the time) that it was necessary to have absolute presidential removal power. Now, as a justice, she sits on the other side of the divide between rational and arbitrary executive control over the government.
If Humphrey’s Dies, Is the Civil Service Next?
The Reform for Results working group was formed in response to Trump’s Schedule F executive order issued at the end of his first administration, which sought to make all policy-making officials subject to “at will” employment. That order was overturned by President Biden, and is now back in the form of Schedule Policy/Careers, in a process that is currently underway in the Office of Personnel Management.
Since the scope of the new order could apply to over 50,000 civil servants, huge numbers of federal workers would be denied the protection of requirements for notice and hearing before the Merit Systems Protection Board prior to dismissal. Indeed, if MSPB Commissioners themselves (i.e. Cathy Harris) lose “for cause” removal protection, would the Court think that the tenure protections contained in the Civil Service Act would be worth preserving consistent with the extreme unitary executive theory represented by Trump v. Wilcox? This is yet another reason why the survival of Humphrey’s in some form is so important to the 100-plus-year-old civil service, and the merit-based system governance that replaced the 19th-century spoils system.
Paul Verkuil is an administrative law scholar who served as Chairman of the Administrative Conference of the United States from 2010 to 2015.
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The design of this still greatest nation on God's green earth is one of limited federal government. We simply do not need all these civil servants that really are only servicing themselves and the Democrat political machine that overpays them and gives them cradle to grave job security... while many of them work to layer on new rules, regulations and enforcements that result in millions of lost jobs in the private sector.
The President is the top elected official. These activist Regime Democrat judges are not... and they are out of line.
The solution for fixing THAT problem is next up.