Those who have watched U.S. labor law over the past year know that things have been, to put it mildly, unusual. Now, the NLRB is in reset mode to clear out their case backlog while regional offices are struggling with short staffing. And that’s only the operational side of their difficulties.
There’s also a pair of legal developments that could fundamentally change labor law enforcement. Both cases involve SpaceX, which in turn scored two wins against the Board. One case involves a jurisdictional declaration that removes the Board’s authority over SpaceX, and the other involves a successful constitutional challenge against the Board’s structure.
Yet there’s a twist: SpaceX’s success in shaking off NLRB jurisdiction might have inadvertently undermined its legal standing to challenge the agency’s constitutionality, which could complicate future proceedings if that issue goes to the Supreme Court due to a circuit split.
If you think this sounds too circular to wrap your hands around, you are spot on. Let’s make some sense out of this developing situation.
The Jurisdictional Outcome
On Feb. 9, it was announced that the NLRB stepped away from a multi-year battle against the Elon Musk-led company. This notice came from Regional Director Danielle Pierce in a dismissal letter, in which she cited a Jan. 14 National Mediation Board (NMB) opinion and concluded, “Accordingly, the [NLRB] lacks jurisdiction over the Employer and, therefore, I am dismissing [this] charge.”
Long story short: The NMB had determined, in a case involving fired SpaceX workers, that the company doesn’t fall under the NLRB’s authority but, instead, is covered by the Railway Labor Act (RLA). In doing so, the NMB found that the RLA, which applies to airlines, has jurisdiction over SpaceX disputes because the company is in the business of providing commercial flights, and “[p]rior to entering outer space, space transport includes air travel within the same air space as airlines.”
The Board itself had no comment on the matter after the regional director agreed with this determination.
A side effect: The RLA is more employer-friendly than the NLRB due to making organizing more difficult. The act raises the threshold for filing a union petition, and the RLA’s mediation requirements make strikes less likely. So, there are multiple reasons for SpaceX to be pleased with this part of the case’s outcome.
The Twist: Is SpaceX’s Standing Gone?
With the above said, this jurisdictional determination could backfire on SpaceX’s interests due to an interesting question: If the company is no longer subject to NLRB oversight, does it still have standing to challenge the agency’s structure as unconstitutional?
To have standing in a lawsuit, a party must have a personal stake in the case’s outcome and an injury that the court could remedy. Since SpaceX apparently no longer answers to the NLRB, it likely doesn’t have sufficient interest in the Board’s structure to support a lawsuit.
Let’s keep going with this train of thought.
SpaceX’s Constitutional Challenge Against the Board
In Aug. 2025, the Fifth Circuit granted an injunction to SpaceX, which argued that the Board’s structure could violate separation of powers. The court agreed, finding that NLRB members and ALJs’ removal shields are unconstitutional. This ruling also froze ULP cases against SpaceX (and two other Fifth Circuit employers) on the grounds that subjecting companies to an unconstitutionally structured agency could cause “irreparable harm.”
The NLRB then declined to appeal, and the Supreme Court disallowed a motion to intervene from the AFL-CIO and OPEIU due to lack of standing, so the Fifth Circuit’s ruling remains binding and benefits employers in states including Texas, Louisiana, and Mississippi.
However, SpaceX no longer falls under the NLRB’s jurisdiction, so that takes away an “irreparable harm” claim to establish standing if this issue goes to the Supreme Court. This could very well happen, since the Third Circuit disallowed an employer from using injunctions to halt NLRB proceedings while arguing the NLRB is unconstitutional. Similarly, the Ninth Circuit also rejected employers’ constitutional attacks on the Board.
What’s Next?
The only currently evident outcome with these SpaceX developments is this: The NLRB’s authority is being eroded. Several employers including Starbucks and Trader Joe’s have also argued against the Board’s structure, and the NLRB chose not to defend itself against the Fifth Circuit’s ruling. Yet if the Supreme Court chooses to resolve the circuit split, they’ll likely do so without SpaceX’s participation due to the jurisdictional finding.
This complicated web might get messier, and clearly, the legal landscape surrounding the Board is in flux. This might not go much further if Congress or other courts step in to bolster the NLRB’s authority, but still, stay tuned.
