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President Hoover appointed, and the Senate confirmed, Humphrey as a commissioner of the Federal Trade Commission (FTC). In 1933, President Roosevelt asked for Humphrey's resignation since the latter was a conservative and had jurisdiction over many of Roosevelt's New Deal policies. When Humphrey refused to resign, Roosevelt fired him because of his policy positions. However, the FTC Act only allowed a president to remove a commissioner for "inefficiency, neglect of duty, or malfeasance in office." Since Humphrey died shortly after being dismissed, his executor sued to recover Humphrey's lost salary.

Did section 1 of the Federal Trade Commission Act unconstitutionally interfere with the executive power of the President?

The unanimous Court found that the FTC Act was constitutional and that Humphrey's dismissal on policy grounds was unjustified. The Court reasoned that the Constitution had never given "illimitable power of removal" to the president. Justice Sutherland dismissed the government's main line of defense in this case which relied heavily on the Court's decision in Meyers v. United States (1926). In that case the Court upheld the president's right to remove officers who were "units of the executive department." The FTC was different, argued Sutherland, because it was a body created by Congress to perform quasi- legislative and judicial functions. The Meyers precedent, therefore, did not apply in this situation.