NLRB Gets Closer to Axing Case on SpaceX Firing Musk Critics (3)

A federal appeals court granted a joint request from SpaceX and the National Labor Relations Board seeking the opportunity to pursue a process that could end in the agency dropping its case against the company.

The US Court of Appeals for the Fifth Circuit ruled Monday on the parties’ combined bid to ensure the National Mediation Board, which administers labor law for the airline and railroad industries, can get the chance to opine on whether Elon Musk’s aerospace company falls outside of the NLRB’s jurisdiction.

The decision involves two separate, intertwined cases pitting the NLRB against SpaceX: the agency’s administrative case accusing the company of violating federal labor law by firing workers who were critical of Musk, and the company’s lawsuit filed in response alleging elements of the agency are unconstitutional.

SpaceX has aggressively litigated its courtroom counterattack against the NLRB following agency prosecutors alleging in January 2024 that the company retaliated against workers because of their involvement in an open letter that said “Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us.”

The company lodged its constitutional lawsuit against the NLRB in Texas, even though the underlying NLRB case is centered in California, leading to a jurisdictional dispute that’s generated multiple transfer orders and remains unresolved.

Although SpaceX couldn’t get the Fifth Circuit to keep its lawsuit in Texas—despite trying twice—the company did win an order from the appeals court that froze the NLRB case. A Fifth Circuit motions panel paused the underlying case while SpaceX argued that the trial court effectively denied its request for a preliminary injunction by not meeting the deadline that the company imposed.

SpaceX didn’t give up after losing its effective denial appeal, instead asking the whole Fifth Circuit to reconsider the issue. But that en banc motion is also on hold under the order issued Monday.

The effect of the company’s litigation has been to prevent the NLRB’s case from advancing during the last year of the Biden administration. President Donald Trump fired NLRB General Counsel Jennifer Abruzzo and replaced her with acting GC William Cowen shortly after beginning his second term in office.

During the first Trump administration, the NLRB dropped cases based on NMB advisory opinions saying that an employer at issue is covered by the Railway Labor Act rather than the National Labor Relations Act.

An attorney for the workers who brought the charges against SpaceX condemned the NLRB’s joint effort with the company seeking to remove employees’ NLRA protections.

“The General Counsel’s decision was made purely at the request of SpaceX, without notice to or input from our clients—the employees whose rights are at the heart of this matter,” Anne Shaver of Lieff Cabraser Heimann & Bernstein LLP said in a statement. “It is also contrary to the NLRB’s decision not to refer this matter to the NMB one year ago, showing how politically motivated this decision is.”

An NLRB spokesperson declined to comment.

SpaceX’s lawyer, Michael Kenneally of Morgan, Lewis & Bockius LLP, didn’t respond to requests for comment.

The case is Space Exploration Technologies Corp. v. NLRB, 5th Cir., No. 24-40315, joint motion granted/denied 5/5/25.