So far, 2024 appears to be the year that employers are pushing back against what they believe is essentially unchecked power of the National Labor Relations Board (NLRB).
Congress enacted the National Labor Relations Act (NLRA) in 1935, and it took a Supreme Court ruling to push the NLRB into effect because the agency did not jibe with employers’ abilities to run their businesses as they saw fit. Since then, the NLRB’s political balance has careened back and forth, and as we all know, the Supreme Court of the United States (SCOTUS) is a very different beast in 2024, so this legal saga could get interesting should the issue go that far.
The current fight began in early January when SpaceX filed a lawsuit against the NLRB to challenge the agency’s constitutionality. Three other companies – Starbucks, Trader Joe’s, and Amazon – have now followed suit. This growing collective of employers takes issue with how the NLRB is structured, and SpaceX argues that the NLRB violates the separation of powers. The company also requests an injunction against the Board’s decision that SpaceX illegally fired employees who criticized CEO Elon Musk.
A few points of distinction exist between these four employers’ arguments:
- The companies largely agree in their argument that the NLRB’s structure is not constitutionally sound and that it is allowed to run unchecked while writing rules and using in-house judges to make rulings about these rules. The board also enforces its own rules, arguably assuming the roles of all three government branches.
- SpaceX specifically claims that the NLRB’s structure violates Article II of the U.S. Constitution, the Fifth Amendment (on due process protections), and the Seventh Amendment (on a right to jury trial).
SpaceX’s argument arose in a federal lawsuit, whereas Amazon and Trader Joe’s arguments surfaced in administrative proceedings. So, SpaceX’s case will be decided first and conceivably could go all the way to SCOTUS, which is also reviewing a case on the Board’s 10(j) injunctions over unfair labor allegations against Starbucks. - Amazon slightly departs in its argument by referring to the “major questions doctrine,” a principle that dictates how courts must presume that, in the absence of a clear statement otherwise, Congress does not delegate matters of political or economic significance to agencies.
A worker joins the cause: A Starbucks barista is also suing the NLRB in a Texas federal court. In this case, the issue is how a regional NLRB director dismissed a decertification petition, thereby barring a vote to remove the union. The National Right To Work Foundation is now representing the barista and pushing for the decertification process to go forth.
Where the SpaceX lawsuit currently stands: The company initially lost its bid to hold the case in a Texas federal court, with the judge saying the case should be moved to California, where the employees who wrote the letter were fired, and SpaceX is headquartered. However, earlier this week, a federal appeals court paused the transfer (paywall) of SpaceX’s lawsuit, giving Elon Musk’s firm a chance to contest a lower court’s order sending the case from Texas to California.
This is where things get trickier. If SpaceX’s case stays in the Fifth Circuit, SpaceX could have an easier route to lawsuit victory because the Fifth Circuit previously ruled against an agency (the Security and Exchanges Commission) on whether the SEC’s structure violated the Seventh Amendment.
The barista’s lawsuit appears rooted in Texas, but the SpaceX lawsuit is the bigger one to watch for now.
