SpaceX Sues the NLRB for Alleged Violation of U.S. Constitution

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Elon Musk is in the news again. SpaceX sued the National Labor Relations Board (“NLRB”) on Thursday, January 4, 2024, claiming that the NLRB’s structure violates the U.S. Constitution. The lawsuit comes after the NLRB filed an administrative complaint against SpaceX, alleging that the company unlawfully fired eight employees who had drafted and circulated an open letter detailing workplace concerns at SpaceX.

While the NLRB is a well-known federal administrative agency that adjudicates unfair labor practices complaints, SpaceX describes that the NLRB is in derogation of separation of powers principles embodied in the U.S. Constitution because, by statute, NLRB judges (known as Administrative Law Judges (“ALJs”)) cannot be removed by the President of the United States. This insulation-from-removal by the President is unlawful, SpaceX contends, because ALJs exercise executive functions or powers—which subjects them, SpaceX further contends, to Presidential discretion and removal at will. But, because federal statute insulates the ALJs from Presidential removal, SpaceX argues, the NLRB must be enjoined (stopped) by court.

The SpaceX complaint is inspired by a recent lower court of appeal ruling that attacked the legality of ALJs in another, unrelated case. While the SpaceX complaint potentially undercuts the NLRB’s structure, only time will tell if the U.S. Supreme Court or a court of appeal will affirm SpaceX’s effort to enjoin the NLRB. But if SpaceX succeeds, it could potentially send shockwaves to the NLRB and in unfair labor practice proceedings.

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This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.