In today’s news and commentary, the Trump administration proposes to reduce the Consumer Finance Protection Bureau to a third of its former size, and the Ninth Circuit holds that an arbitrator finding one employee’s arbitration agreement invalid does not invalidate the identical agreements of other employees.

Bloomberg reports that the Trump administration has settled on a strategy of only partially dismantling the Consumer Finance Protection Bureau (CFPB). Last week, Russell Vought, director of the Office of Management and Budget (OMB) and acting director of the CFPB, submitted a plan to the DC Circuit that would reduce the agency to about a third of its former size. Under Biden, the CFPB had about 1,500 staff. The Trump administration initially tried to fire as many as 90% of those employees, but a federal judge enjoined the mass firings. Since then — with the injunction still in effect — the agency has been trimmed down to about 1,200 staff. Under Vought’s new proposal, which he hopes will induce the court to lift the injunction, that number would decline to about 550. The National Treasury Employees Union (NTEU) points out that those cuts will lead to significant consumer harm: “Vought’s insistence that CFPB can meet its statutory obligations with only one-third of the staff is laughable, and an insult to the intelligence of the judges. Everyone knows Vought doesn’t want CFPB to exist at all.” Still, some see the move as a kind of admission of defeat by the administration — which had hoped to eliminate the agency outright — and “almost the best result for the staff and union that could be achieved under the circumstances.” On this optimistic account, Vought’s plan leaves an opening for a future Democratic administration to rebuild the CFPB.

In other news, a Ninth Circuit panel held last week that an arbitrator finding one employee’s arbitration agreement invalid does not invalidate the identical agreements of other employees. The case, O’Dell v. Aya Healthcare Services Inc., originated as a putative class action brought by four travel nurses suing their employer for reducing their pay mid-contract. Each of the more than 250 nurses had entered into an arbitration agreement with the employer, and the agreements all contained a “delegation clause” that required an arbitrator (not a court) to determine the validity of the arbitration agreement. After the district court sent the four nurses to individual arbitration, two of the arbitrators found that, as an initial matter, the arbitration agreements were valid, but the other two found them unconscionable and invalid. Relying on these latter findings (which it found more “reasoned” and “thorough”), the district court applied the doctrine of non-mutual offensive collateral estoppel to invalidate the arbitration agreements of the other 255 nurses. The Ninth Circuit rejected this move as incompatible with the Federal Arbitration Act (FAA): “Doing away with [individualized, one-on-one] proceedings between mutually consenting parties, because other arbitrators in other proceedings involving other parties have already decided the issue, is anathema to the FAA.” The court did not address the uniformity concern that arises out of half the arbitrators declaring the agreements valid and the other half declaring them invalid, nor how else this concern might be met given the agreements’ delegation clause.