The End of For-Cause Removal? Supreme Court Reshapes Removal Protections for Independent Agency Leadership

On June 29, 2026, the U.S. Supreme Court issued two decisions addressing the president’s power to remove appointed federal officials, which will likely have dramatic implications for a broad range of federal independent agencies and the U.S. regulatory landscape.

In Trump v. Slaughter, 609 U.S. ___ (2026), the Court held that the statutory “for cause” removal protection afforded to Commissioners of the Federal Trade Commission (FTC) violates the Constitution’s separation of powers.¹ This decision overturned foundational precedent in Humphrey’s Executor v. United States that for nine decades has shielded heads of independent regulatory agencies from presidential removal at will.² The Slaughter case broadly reshapes the constitutional architecture of federal independent agencies and substantially weakens the statutory insulation from at-will removal of agency heads. Notably, the dissenting opinion warned that “dozens” of such agencies are “now likely to become purely executive agencies, shifting tremendous power over broad swaths of American life into the President’s hands.”³

Despite the expansion of the president’s power to remove appointed officials at will in Slaughter, the Court in Trump v. Cook, 609 U.S. ____ (2026), specifically carved out the Board of Governors of the Federal Reserve System (the Federal Reserve) from the Slaughter decision, leaving intact for-cause protection afforded to Federal Reserve Governors. Although the Court denied the stay on the narrow ground that Governor Cook had not received the process required by statute, the majority also expressly held that the Federal Reserve’s for-cause removal protection is consistent with Article II. The Court left unresolved whether the alleged conduct ultimately constitutes cause for Governor Cook’s removal.

While the Court’s Cook decision is in tension with the Slaughter decision, the unique circumstances identified by the Court in Cook suggest a narrow limitation whose application beyond the Federal Reserve remains uncertain. As such, the Slaughter decision likely provides the presumptive legal precedent for agency independence.

Trump v. Slaughter: New Precedent for Independent Federal Agencies

In March 2025, President Trump fired the FTC’s two Democratic Commissioners without asserting any statutorily required grounds. Instead, the president stated that he was removing them because he believed that their continued service was inconsistent with his administration’s priorities, invoking his authority under Article II of the Constitution. Rebecca Slaughter, one of the two removed Democratic Commissioners, filed suit against the president seeking injunctive relief to restore her to office.

The Majority Opinion

The case presented a foundational question of executive power: whether the president has the authority to fire officials at independent federal agencies at will. In the 6-3 ruling, with Chief Justice Roberts writing for the majority, the Court held that heads of multi-member independent agencies who exercise executive power — including rulemaking, adjudication, and civil enforcement power — may be removed by the president at will, without the “for cause” protection provided by Congress. The Court grounded its analysis in Article II of the Constitution, which vests executive power in the president and instructs the president to “take Care that the Laws be faithfully executed.”⁴ The Court explained that, because subordinate officers exist to assist the president in discharging that duty, they must remain accountable to the president — and removal power is the mechanism that enforces that accountability.

Addressing applicable precedent, the Court reaffirmed Myers v. United States,⁵ which held that the president’s removal power flows directly from Article II and does not depend on any subsequent statute. The Court overturned Humphrey’s Executor, which permitted for-cause removal protection for the FTC in 1935, on the theory that FTC Commissioners performed only “quasi-legislative” and “quasi-judicial” functions rather than exercising “executive power.” The Court concluded that this characterization of the FTC, as exercising “no part of the executive power,” “has not withstood the test of time.”⁶ In coming to its decision, the Court noted that later decisions have progressively recognized that such functions are, in fact, executive.⁷ Weighing traditional stare decisis factors, the Court found that the “quality” of the Humphrey’s reasoning, its “consistency” with later cases, its “workability,” and the reliance interests at stake all favored overruling it.⁸

Applying this framework, the Court held that the FTC “unquestionably exercises executive power,” pointing to its authority to promulgate rules carrying the force of law, conduct in-house adjudications backed by penalty authority, and file civil suits on behalf of the United States.⁹ The Court concluded that these functions are “the very essence of ‘execution’ of the law,” and Commissioners exercising these functions must therefore be removable by the president at will and without statutory limitation.¹⁰

Concurrence

While agreeing that principal officers exercising executive power must be removable at will, Justice Gorsuch’s concurrence warned that independent agencies exercise not just executive power, but “vast legislative and judicial powers,” and that, after the Slaughter decision, the president now “can effectively exercise all those powers too.”¹¹ Justice Gorsuch observed that agencies like the U.S. Securities and Exchange Commission (SEC) hold sweeping rulemaking authority — citing its power to make such rules and regulations as necessary or appropriate to fulfill its mandate of ensuring fair and honest markets — and pointed to the SEC’s 2024 climate-disclosure rules as a recent example of that authority in use.¹² Gorsuch also raised the prospect of what may occur when a business faces coordinated pressure from enforcement, rulemaking, and adjudication acting in concert, warning that these “now-coordinated powers” could be turned against “disfavored” individuals or entities, and suggesting that doctrines like nondelegation and the major questions doctrine may need to bear more weight going forward as a check on that combined power.¹³

Dissent

Justice Sotomayor’s dissenting opinion (joined by Justices Kagan and Jackson) stated that the decision “undoes centuries of political practice” and elevates the president “above his once-coequal branches.”¹⁴ The dissenting justices argued the case should have begun and ended with Humphrey’s Executor, which addressed the same statute under nearly identical circumstances. The dissent maintained that “[90] years of precedent and 140 years of consistent political practice should have been more than enough to resolve this case,” and neither the nation’s founding nor the Constitution’s text and structure prohibit for-cause removal protections.¹⁵ Significantly, the dissent identified several agencies likely transformed by the decision, and noted that the government itself conceded at oral argument that the “logic” of its position “extends to inferior officers and, perhaps, career civil servants, too” — a concession the majority’s holding does not disavow.¹⁶

Trump v. Cook: A Different Result for the Federal Reserve

Notably, the Court’s Slaughter opinion explicitly states that the decision does not “implicate the constitutionality” of the Federal Reserve, thereby distinguishing the Court’s decision in Slaughter from Cook.

Background

In 2022, President Biden appointed Lisa Cook to the Board of the Federal Reserve to complete former Federal Reserve Chair Janet Yellen’s unexpired term, and in 2023 reappointed Cook to a full 14-year term set to expire in 2038.¹⁷ In August 2025, the Director of the Federal Housing Finance Agency publicly accused Governor Cook of committing mortgage fraud years before she joined the Federal Reserve Board. President Trump publicly called for Governor Cook’s resignation, and days later purported to fire her “for cause,” stating that he lacked confidence in her integrity.¹⁸ This was the first time in the Federal Reserve’s 111-year history that a president had attempted to fire a Federal Reserve Governor.¹⁹

Governor Cook sued, arguing that her alleged conduct did not constitute “cause,” and that she was statutorily and constitutionally entitled to notice and an opportunity to respond before removal, which she never received. The District Court agreed and entered a preliminary injunction preventing the removal from taking effect and requiring the Federal Reserve Board to allow Cook to remain in office pending the litigation. The Court of Appeals declined to stay the injunction, and the government appealed to the Supreme Court for a stay pending appeal — not final merits review, but an order that would have permitted Governor Cook’s removal to take effect while the underlying suit proceeded.

The Majority Opinion

Writing for a 5-4 majority (joined by Justices Sotomayor, Kagan, Kavanaugh, and Jackson), Chief Justice Roberts denied the government’s stay application, holding that it had not shown a likelihood of success on the merits.²⁰ In coming to this determination, the Court made three findings rejecting the government’s arguments. First, the Court found that the president’s determination of “cause” is judicially reviewable, and that neither the statute nor the common law commits that determination to the president alone. Second, the Court found that “any definition of ‘cause’ in this context must reflect the Federal Reserve’s unique historical status and role,” which requires a “substantial threshold” showing that turns on whether the “cause assigned” truly “implies an unfitness for the place,” or is instead a pretext to secure a “more congenial” replacement.²¹ Third, the Court found that federal courts retain equitable power to reinstate a wrongly removed officer pending litigation, consistent with historical practice protecting de facto officeholders until a court of law finally determines title to office.

The Court ultimately made its ruling on narrow procedural grounds: that Governor Cook was entitled to notice and some opportunity to respond before removal, a right traced to the “settled interpretation at common law” for officers holding a fixed term limited only by removal for cause. The Court determined that because the president gave her no meaningful opportunity to respond, the removal could not stand on the record presented.

Importantly, the Court separately affirmed that the Federal Reserve’s removal protection is consistent with Article II, tracing its independence to the historical tradition of the First and Second Banks of the United States and emphasizing that “[n]ot only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design.”²² The Court expressly left open whether Governor Cook’s alleged conduct could ultimately satisfy “cause” once she receives proper process, and noted the president remains free to try again if he affords her adequate notice and an opportunity to respond.

Concurrences

Justice Kavanaugh, concurring, wrote separately to stress his agreement with the majority in its decision to not leave open the question as to whether the Federal Reserve should remain independent after Slaughter, warning that “even temporary uncertainty about the status of the Federal Reserve could spark political upheaval, including confusion about whether the president could immediately remove multiple governors at will, as well as turmoil in the U.S. and world economies.”²³ Justice Jackson, also concurring, wrote separately, concluding that the government had identified no cognizable injury from Governor Cook’s continued service. She further concluded that “the public’s interest is not served if a President can intimidate members of the Federal Reserve into doing his bidding,” and weighed decisively against a stay.²⁴

Dissents

Justice Thomas dissented, arguing that the Federal Reserve Board “unquestionably exercises executive power” — invoking the majority’s own language from Slaughter — and should therefore be subject to at-will removal without exception.²⁵ He rejected the majority’s analogy to the First and Second Banks as ahistorical, arguing that those banks, unlike the modern Federal Reserve, exercised no executive power and were privately run institutions with only incidental government involvement. Justice Alito, joined by Justice Gorsuch, also dissented, but on narrower procedural grounds, criticizing the majority for resolving numerous unsettled and complex legal questions on an underdeveloped record at an early, interim stage of the litigation, rather than limiting review to the two issues actually decided below.²⁶ Justice Barrett, dissenting separately, objected specifically to the majority reaching the constitutionality of the Federal Reserve’s removal protections at all.²⁷ She also warned that the majority’s carve-out sits in “serious tension” with Slaughter’s categorical rule that any agency executing a mandate against private parties exercises executive power.

Impact of Slaughter and Cook on Independent Agencies and Regulated Entities

Read together, Cook and Slaughter provide the loose outlines of a new framework regarding the president’s removal power. Slaughter sets forth the default: heads of independent, multi-member agencies that exercise executive power are now removable by the president at will. Cook confirms that this default is not universal, carving out the Federal Reserve based on its unique historical status and role rather than any functional distinction from agencies like the FTC. As Justice Kavanaugh’s concurrence makes clear, the Court treated this clarification as to the applicability of Slaughter to the Federal Reserve as urgent, resolving Cook the same day to avoid leaving the Federal Reserve’s status in doubt and destabilizing its independence. Even so, the two decisions sit in tension. Read together, Slaughter and Cook establish a general rule with a historically grounded exception. Slaughter holds that officials within the president’s general administrative control who exercise executive power generally must be removable at will. Cook holds that Federal Reserve Governors may retain for-cause protection because of the Federal Reserve’s distinctive historical tradition, structure, and monetary-policy role. The decisions leave uncertain whether any other entity or function has a comparably distinctive historical footing.

For regulated entities, the practical takeaway is straightforward: Slaughter, not Cook, provides the rule of general application. Financial market regulators such as the SEC and the Commodity Futures Trading Commission (CFTC) are materially indistinguishable from the FTC for purposes of this analysis, and their Commissioners’ removal protections rest on the same, now-overruled precedent. This shift likely has no immediate practical effect at the SEC or the CFTC — as both currently have no sitting Democratic Commissioners. It nevertheless creates the possibility of sudden removals in the future and should inform how regulated entities plan going forward.

What this means is hard to predict, but it is possible that entities regulated by the SEC and/or CFTC will see faster and less predictable shifts in enforcement priorities, rulemaking agendas, and policy positions, particularly as commission composition becomes easier for a president to reshape mid-term. Regulated entities should pay close attention to how the political pressures and media scrutiny surrounding any administration’s relationship with its appointees may translate into abrupt reversals of guidance, no-action positions, and enforcement priorities and strategies.

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Arnold & Porter continues to monitor administrative and regulatory shifts at the U.S. market regulators. Please reach out to the authors of this Advisory or your regular Arnold & Porter contact for additional information.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.