A federal appeals court delivered a significant victory to SpaceX, ruling that the structure of the National Labor Relations Board (NLRB) is likely unconstitutional. The decision by the U.S. Court of Appeals for the Fifth Circuit halts ongoing unfair labor practice cases against SpaceX, Energy Transfer, and Findhelp. The companies argue that the NLRB’s in-house administrative law judges enjoy protections from removal that violate constitutional separation of powers. The three-judge panel agreed that forcing companies to undergo proceedings before a potentially unconstitutional body constitutes “irreparable harm.” This ruling prevents the NLRB from prosecuting claims until the constitutional questions are resolved.
The case against SpaceX stemmed from the company’s dismissal of employees who signed an open letter criticizing CEO Elon Musk and what they described as a culture of sexism. While the appeals court sided with the companies, the matter is far from settled, as the NLRB is expected to challenge the decision. The panel included two judges appointed by former President Donald Trump and one appointed by former President George H.W. Bush. The outcome could have wide-reaching implications for the NLRB’s authority in regulating labor practices across industries.
