A federal appeals court handed SpaceX a win on Tuesday. The ruling prevents the National Labor Relations Board from prosecuting unfair labor practices against the company. The decision by the Fifth Circuit Court of Appeals could have far-reaching effects, as it suggests the structure of the NLRB is likely unconstitutional.
This ruling keeps unfair labor practice cases against SpaceX and two other companies, Energy Transfer and Findhelp, on hold. The companies are pursuing their claim that the NLRB’s structure violates the U.S. Constitution. While the court did declare it unlawful, this is far from a settled issue, and the NLRB is undoubtedly likely to challenge the ruling.
The three-judge panel stated that being subjected to a possibly unconstitutional administrative proceeding is an irreparable harm. This finding supports the decision to continue the pause on the case. The NLRB originally brought the unfair labor practices claim against SpaceX after the company fired a group of employees. Those employees had signed an open letter criticizing CEO Elon Musk and a culture of sexism within the company.
The core of the dispute centers on whether the NLRB’s in-house judges, known as administrative law judges, have unlawful protections that shield them from removal by the President. The judges said if that is the case, it violates constitutional rules governing the separation of powers. The panel included two judges appointed by President Donald Trump and a third judge appointed by George H.W. Bush.