Businesses are preparing for the consequences of a Supreme Court ruling last week that permits the president to dismiss members of federal regulatory boards at will, eliminating the independence those agencies previously maintained from the White House.
The decision affects more than a dozen agencies that supervise utilities, railroads, investment banks, labor matters, and major technology firms. Corporate leaders and legal advisers are now confronting the prospect that these rule-making and enforcement bodies could become far more politicized.
“It enables a lot more mischief,” said Douglas Melamed, former general counsel at chip manufacturer Intel and ex–senior official at the Justice Department. “The president is totally free to micromanage things and really squeeze these agencies.”
The verdict adds to the uncertainty of operating in the United States, where regulatory posture has long shifted with the governing party. Republicans generally eased restrictions, while Democrats typically imposed new ones.
Under the Biden administration, for instance, regulators curtailed drilling on public lands, barred noncompete clauses, and sued Adobe and Live Nation over alleged antitrust and consumer protection violations. After Trump returned to office, his appointees swiftly reversed or dropped those actions and settled the cases.
Such swings were historically tempered by agencies with bipartisan leadership, and federal law barred the president from removing regulators without cause.
Former executives, ex-regulators, and legal scholars warn that the ruling may usher in more volatile policymaking. Many firms plan expansions and investments years ahead, and regulatory ambiguity often suppresses growth.
“Stability is the most important thing,” said Samuel J. Palmisano, former IBM chief executive and board member of America’s Frontier Fund. The decision “will slow down innovation.”
The independent agencies covered by the ruling include the Federal Trade Commission, which shields consumers from deceptive advertising and anti-competitive conduct; the Federal Energy Regulatory Commission, overseeing interstate power lines, natural gas, and grid operators; the Surface Transportation Board, which sets rail rates; and the National Labor Relations Board, handling labor disputes.
Agency commissioners—usually a mix of Republicans and Democrats—are presidential appointees. In 1935, the Supreme Court held that the president could not remove them over political or policy disagreement.
That standard held until last year, when Trump ousted Democratic commissioners at the FTC, NLRB, and Surface Transportation Board.
Rebecca Kelly Slaughter, a dismissed FTC member, challenged her firing at the Supreme Court, arguing it was unlawful. The court ruled against her last week.
FTC spokesman Joe Simonson said the agency delivered “clarity for the business community that was under assault by the previous administration’s left-wing ideologues.” He added, “There is nothing novel about President Trump’s position as the rightful leader of the executive branch, which the court affirmed.”
Some regulatory and corporate advisers say it is uncertain how much the ruling will actually shift agency agendas, noting most regulators already followed White House policy even when independent.
“The notion that Slaughter is a big deal because it gives the president more composed power over the policy agenda is exaggerated,” said Joseph Grundfest, former SEC commissioner and now a Stanford law and business professor.
But he noted agencies traditionally set politics aside in enforcement. The White House could now exert more control over choices such as whether to litigate insider-trading cases.
Companies are planning ahead, said Matthew L. Schwartz, chairman of Boies Schiller Flexner.
“They’re doing what smart people and smart companies do, which is solicit input from a lot of knowledgeable people about what might be coming around the corner so they can try and do some contingency planning,” said Schwartz, whose clients include DraftKings and AIG.
The president’s new removal power could reshape key economic sectors.
Union Pacific and Norfolk Southern last year proposed a coast-to-coast rail merger needing Surface Transportation Board approval. Trump’s 2023 firing of board member Robert E. Primus—who opposed a prior rail merger—may improve the deal’s odds, analysts say. The board declined to comment.
Consumer groups worry a partisan FERC could affect energy prices.
“FERC has really been through Republican and Democratic administrations and really worked hard to be nonpartisan,” said Tyson Slocum, energy program director at Public Citizen. “What the Supreme Court has done is toss that aside.”
The ruling also matters for firms before the NLRB, which handles labor practice cases and union recognition.
If the agency loses perceived independence, unions and businesses may distrust its decisions, said labor experts, who note state agencies might fill gaps, creating conflicting rules.
Companies have spent the past year and a half courting the Trump administration. His new firing power may speed that trend, specialists say.
Many have already sought ties to Trump’s circle or donated to his inauguration, library, or projects, said Jill Zuckman, partner at SKDK and former Obama aide who represents tech and transport clients.
“It’s going to supercharge what a lot of companies have been doing,” Zuckman said.