It’s been a minute since we discussed the companies that are challenging the NLRB’s constitutionality. Naturally, unions aren’t taking kindly to this stance, but they shouldn’t be too surprised after the Biden administration stacked the deck against employers by fast-tracking union elections. These constitutional challenges have also intensified after the Supreme Court bid farewell to Chevron deference over the summer.
As a result of that SCOTUS decision, courts can get more involved with interpreting administrative law, so we are seeing more employers take on agency decisions and regulations. Companies are now following suit after SpaceX took the lead in questioning the NLRB’s structure and powers.
Let’s catch up on where current efforts stand.
Spoiler alert: there is plenty of action in the Fifth Circuit Court of Appeals, which has a business-friendly reputation. Currently, three judges in that circuit have ruled that the NLRB’s structure is “likely” unconstitutional.
SpaceX: Earlier this year, the rocket manufacturer filed suit against the NLRB’s use of in-house judges and the Board’s authority to enforce administrative law rulings – essentially acting as legislative, judicial, and executive branches in a one-stop shop. SpaceX further alleged that the Board’s judges are insulated against presidential removal in violation of the U.S. Constitution’s Appointments Clause.
Several employers, including grocery chain Trader Joe’s, Chicago-based restaurant chain Portillo’s, and pipeline operator Energy Transfer, have echoed SpaceX’s arguments with the National Audubon Society reportedly also moving in the same direction.
The latest updates on SpaceX’s position include a Fifth Circuit Appeals judge blocking the NLRB’s request for a stay on the structural challenges. The Elon Musk-owned company will also continue its legal pursuit against the Board’s administrative proceedings over SpaceX allegedly firing workers who criticized Musk.
Starbucks: Ditto on the above SpaceX arguments against the legality of the Board’s structure. Additionally, an NLRB judge answered a Starbucks challenge by declining to weigh in on his own agency’s constitutionality and calling this “a matter for the federal courts to decide.” In the Fifth Circuit, perhaps? The coffeehouse giant has already been there on other NLRB-associated issues, so it’s not unfamiliar territory.
Amazon: The online retailer has been lodging constitutional challenges against the NLRB in federal courts and with the NLRB itself.
The company requested for a federal court to block the NLRB from forcing it to bargain with the Amazon Labor Union over the JFK8 warehouse while challenges on the NLRB’s structure are ongoing. When that judge delayed action, Amazon appealed to the Fifth Circuit, which granted Amazon an emergency injunction against the NLRB.
Yet, on a later-breaking note, a U.S. district judge ruled that Amazon cannot have its challenges to the NLRB’s structure heard in a Texas court and must do so in D.C., which is the preferred NLRB venue.
Additionally, Amazon went directly to the NLRB to challenge the agency’s constitutionality, and of course, the NLRB ruled in its own favor. Sigh.
With all that said, don’t be shocked if these challenges to the NLRB’s constitutionality move past the Fifth Circuit and onto the Supreme Court for a final reckoning.
