December 05, 2025|Franchise Frontlines
December 5, 2025 | United States Court of Appeals for the District of Columbia Circuit | Published Opinion
Executive Summary
In a significant separation-of-powers decision, the United States Court of Appeals for the District of Columbia Circuit held that statutory restrictions preventing the President from removing members of the National Labor Relations Board (“NLRB”) and the Merit Systems Protection Board (“MSPB”) without cause are unconstitutional. Members of the NLRB and MSPB had sued federal officials after being removed by the President before the expiration of their terms, arguing that their governing statutes permitted removal only for “neglect of duty or malfeasance in office.” The district courts agreed and enjoined the government from interfering with the officials’ continued service. The D.C. Circuit reversed. Relying on recent Supreme Court precedent addressing presidential removal authority, the court concluded that both the NLRB and MSPB exercise substantial executive power and therefore fall outside the narrow category of agencies whose leaders may be insulated from presidential removal. As a result, the court held that Congress cannot restrict the President’s authority to remove members of these boards.
Relevant Background
The National Labor Relations Act created the NLRB as a five-member agency responsible for administering federal labor law. Board members are appointed by the President with the advice and consent of the Senate and serve staggered five-year terms. The statute provides that a Board member may be removed by the President only for “neglect of duty or malfeasance in office.”
2 – Harris v Bessent
Similarly, the Civil Service Reform Act established the MSPB as a three-member board that adjudicates federal employment disputes involving federal employees and agencies. Members of the MSPB serve seven-year terms and likewise enjoy statutory removal protection allowing removal only for “inefficiency, neglect of duty, or malfeasance in office.”
2 – Harris v Bessent
After the President removed members of the NLRB and MSPB before the expiration of their terms, the removed officials filed separate lawsuits challenging the legality of their removals. They argued that the statutory for-cause removal protections governing their offices remained constitutional under longstanding Supreme Court precedent recognizing the independence of certain multimember agencies.
Two judges of the United States District Court for the District of Columbia agreed with the officials and issued injunctions restoring them to their positions. The federal government appealed, arguing that the removal protections violated the President’s constitutional authority to control executive officials.
Decision
The D.C. Circuit began by examining the constitutional framework governing presidential removal authority. Article II of the Constitution vests the executive power in the President and requires the President to “take Care that the Laws be faithfully executed.” According to Supreme Court precedent beginning with Myers v. United States, Congress generally may not restrict the President’s authority to remove principal officers who exercise executive power.
The court acknowledged that earlier Supreme Court decisions, most notably Humphrey’s Executor v. United States, permitted Congress to impose removal protections for certain members of independent regulatory commissions. However, the court emphasized that more recent Supreme Court decisions have narrowed that exception and clarified that Congress may insulate officers from removal only where the agency exercises limited authority and does not wield substantial executive power.
Applying this framework, the court concluded that the NLRB exercises significant executive authority. The Board has broad rulemaking power to promulgate regulations implementing the National Labor Relations Act and to develop national labor policy. It also conducts administrative adjudications that resolve unfair labor practice charges and may issue orders requiring employers or unions to cease unlawful conduct and take affirmative remedial actions, including reinstatement of employees and awards of back pay.
2 – Harris v Bessent
The court further emphasized that the NLRB has authority to litigate in federal court and to seek injunctive relief in district courts to prevent unfair labor practices. The Board also plays a central role in determining appropriate bargaining units and supervising union elections. Taken together, these powers demonstrate that the Board exercises substantial executive authority rather than merely quasi-legislative or quasi-judicial functions.
The court reached a similar conclusion with respect to the MSPB. The MSPB adjudicates a wide range of federal employment disputes and possesses authority to issue binding decisions requiring federal agencies to comply with its orders. The Board may award remedies including reinstatement, back pay, compensatory damages, and other forms of relief to federal employees.
In addition, the MSPB has rulemaking authority and jurisdiction over numerous federal employment statutes, including those governing whistleblower protections and veterans’ employment rights. Because the MSPB exercises significant policymaking and adjudicatory authority within the executive branch, the court concluded that it too wields substantial executive power.
The court rejected arguments that the agencies’ adjudicatory functions justified insulating their members from presidential removal. The court reasoned that modern administrative adjudication frequently involves policymaking and interpretation of federal statutes, making it an exercise of executive authority rather than purely judicial activity.
Because both agencies exercise substantial executive power, the court held that they fall outside the limited category of agencies whose leaders may be protected from presidential removal under Humphrey’s Executor. The court therefore concluded that the statutory provisions restricting the President’s removal authority were unconstitutional.
As a remedy, the court followed the approach used by the Supreme Court in similar cases and declined to enforce the statutory removal restrictions while leaving the remainder of the governing statutes intact.
Looking Forward
This decision represents a significant development in the ongoing constitutional debate over the structure and independence of federal administrative agencies. By holding that removal protections for members of the NLRB and MSPB violate the President’s Article II authority, the court signaled a continued narrowing of the circumstances in which Congress may insulate agency officials from presidential control.
For employers and businesses subject to federal labor regulation, the decision has potential implications for how quickly labor policy may shift across presidential administrations. The NLRB plays a central role in shaping labor law through rulemaking and adjudication, and greater presidential control over Board membership could lead to faster changes in regulatory priorities and enforcement approaches as administrations change.
Although the decision arises in the context of federal administrative law, it also illustrates broader structural questions about the relationship between government agencies and the entities they regulate. For franchisors and other companies operating within heavily regulated industries, the decision underscores that the institutions responsible for administering labor laws remain subject to evolving constitutional debates that may reshape the balance of authority between Congress, administrative agencies, and the executive branch.
Because the case addresses the continued viability of long-standing removal protections and raises issues currently being reconsidered by the Supreme Court, further appellate review appears likely. Businesses and labor practitioners should therefore expect continued litigation and possible further clarification from the Supreme Court regarding the constitutional limits on independent federal agencies.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
