SpaceX Wins a First Battle in Its Assault on the NLRB

Space Exploration Technologies Corp. (SpaceX) sought a preliminary injunction in a Texas federal district court against the National Labor Relations Board (NLRB) and its officers, including the NLRB’s administrative law judges (ALJs). The core issue was the constitutionality of the removal protections for NLRB members and ALJs.

SpaceX argued that these protections violate the president’s Article II power of removal and the district court, applying the Fifth Circuit’s decision in Jarkesy v. Security and Exchange Commission (SEC), decided that SpaceX was likely to win this argument and preliminarily enjoined the NLRB from initiating an administrative proceeding against SpaceX.

• Legal precedent: the Fifth Circuit’s decision in Jarkesy held that the statutory removal protections for SEC ALJs are unconstitutional due to double-layer protection from removal.
• Application to NLRB ALJs: similar to SEC ALJs, NLRB ALJs have substantial executive functions and are protected by layers of removal restrictions:
  • ALJs can only be removed for good cause determined by the Merit Systems Protection Board (MSPB).
  • MSPB members themselves have for-cause removal protection.
• The court found a substantial likelihood that SpaceX would succeed in proving that these protections for NLRB ALJs are unconstitutional.

• Statutory protections: NLRB members are removable only “for neglect of duty or malfeasance in office” and not for inefficiency, which is…