Appeals court says NLRB structure unconstitutional, in a win for SpaceX

A federal appeals court handed SpaceX a win on Tuesday, in a ruling that prevents the National Labor Relations Board from prosecuting unfair labor practices against the company. The ruling by the Fifth District Court of Appeals, which suggests the structure of the NLRB is likely unconstitutional, could have far-reaching effects.

The ruling keeps unfair labor practice cases against SpaceX and two other companies, Energy Transfer and Findhelp, on hold while the companies pursue their claim that the NLRB structure violates the U.S. Constitution. While the court did declare it unlawful, this is far from a settled issue, and NLRB is undoubtedly likely to challenge the ruling.

The three-judge panel said being subjected to a possibly unconstitutional administrative proceeding, which is what SpaceX claimed, is an irreparable harm – so the pause continues. The NLRB brought the ufair labor practices claim against SpaceX after it fired a group of employees who signed an open letter criticizing CEO Elon Musk and a culture of sexism in the company.

The core of the dispute is over whether NLRB’s in-house judges, called administrative law judges, enjoy unlawful protections that shield them from removal by the President. If that’s the case, it violates constitutional rules governing the separation of powers, the judges said.

The panel included two judges appointed by President Donald Trump and a third judge appointed by George H.W. Bush.