Judge Rules for Musk’s SpaceX in Lawsuit Against National Labor Relations Board

SpaceX, Twitter, and electric car maker Tesla CEO Elon Musk on May 15, 2023. (Michel Euler /Pool/AFP via Getty Images)

The makeup of a federal labor board is likely unconstitutional, a federal judge ruled on July 24, siding with Elon Musk’s SpaceX.

Members of the National Labor Relations Board (NLRB), and administrative law judges (ALJs) employed by the board, are likely unconstitutionally protected from removal by the president, according to U.S. District Judge Alan Albright.

“Under binding precedent, this court is satisfied that SpaceX has demonstrated a substantial likelihood of success on its claims that Congress has impermissibly protected both the NLRB Members and the NLRB ALJs from the President’s Article II power of removal,” he said in a 15-page decision.

SpaceX, which builds and launches rockets and other spacefaring vehicles, filed the legal action in April in Waco, Texas. The company pointed to Article II of the U.S. Constitution, which gives the president all executive power. Under court precedent, the president must have unrestricted power to remove officers, including administrative law judges, who assist him in carrying out his duties.

But under federal law, the NLRB members can only be removed for neglect or malfeasance, and the board’s judges can only be removed if a different board decides there is good cause.

“The statutes’ provision of at least two layers of removal protection prevents that exercise of presidential authority and thus violates Article II of the Constitution,” the suit stated.

SpaceX asked for a preliminary injunction to block proceedings initiated against it by the board. Lawyers for the firm said the company would be harmed if an injunction was not issued. Government attorneys opposed the request, citing a U.S. Supreme Court ruling from 1935, known as Humphrey’s Executor, that found the president does not have “illimitable power of removal” of executive officers.

Judge Albright ruled in favor of SpaceX and imposed an injunction as the case proceeds. He said the ruling came in part because of the U.S. Court of Appeals for the Fifth Circuit’s ruling that restrictions on removal for administrative law judges in the Securities and Exchange Commission are unconstitutional.

“Allowing Congress to eliminate the president’s ability to remove principal officers for inefficiency would be an unjustified expansion of Humphrey’s Executor,” he stated. “Finding that NLRB member’s removal protection constitutional would require this court to expand Humphrey’s Executor where the Supreme Court has repeatedly declined to do so.”

The judge added later that no part of the injunction “prevents Congress from using a constitutional means to achieve its goals.”