SpaceX Keeps Labor Board Case Frozen With Fifth Circuit Win (2)

SpaceX and two other companies can keep their court orders freezing unfair labor practice cases as they litigate their constitutional challenges to the National Labor Relations Board, a federal appeals court ruled in a case with regional implications for the agency.

The US Court of Appeals for the Fifth Circuit said Tuesday that being subjected to an unconstitutional administrative proceeding was an irreparable harm that justified preliminary injunctions halting NLRB cases.

“The Employers have made their case and should not have to choose between compliance and constitutionality,” Judge Don Willett, a Trump appointee, wrote for the court. “When an agency’s structure violates the separation of powers, the harm is immediate—and the remedy must be, too.”

The decision seems to guarantee that companies in the Fifth Circuit—which covers Texas, Louisiana, and Mississippi—can get district courts to block unfair labor practice cases by filing constitutional lawsuits against the agency.

The appeals court panel—which also included Judges Kyle Duncan, a Trump appointee, and Jacques Wiener, a George H.W. Bush appointee—rejected the NLRB’s challenge to injunctions won by the Elon Musk-run SpaceX, an Energy Transfer LP subsidiary, and public benefits corporation Findhelp.

Trump-appointed district judges in Texas granted injunctions based on Fifth Circuit precedent finding that Securities and Exchange Commission administrative law judges have unconstitutional removal protections to the companies’ claims against NLRB ALJs. In the SpaceX case, the judge also held that the board members’ job shields violated the Constitution.

Removal Protections

The Fifth Circuit found that the ALJ’s safeguards are unconstitutional, and the members’ shields are likely unconstitutional.

Members’ for-cause firing shields aren’t constitutional under the US Supreme Court’s decision in Humphrey’s Executor v. US, a 90-year-old precedent that has long supported the restrictions Congress imposed on the president’s power to dismiss independent agency officials, the appeals court said.

NLRB members wield substantial executive power, bringing them outside of the scope of Humphrey’s Executor, which had endorsed removal protections for Federal Trade Commission members, the court said.

The Fifth Circuit also pointed to the high court’s recent decision staying a district court’s order to reinstate Gwynne Wilcox, who was fired by President Donald Trump shortly after his inauguration.

“Admittedly, the merits question for Board Members’ removal protections is a closer call than for ALJs,” the court said. “But both the Supreme Court and this circuit have declined to extend Humphrey’s Executor to agencies that are not a ‘mirror image’ of the FTC.”

Harm Requirement

The Fifth Circuit rejected the NLRB’s argument that the companies needed to show they suffered a distinct injury due to the unconstitutional removal protections.

Forcing employers to appear before an agency that’s structured in violation of the Constitution is an irreparable injury, the court said.

But Wiener, the George H.W. Bush appointed judge, split from his Trump-appointed colleagues on the issue of harm involving the NLRB members’ removal protections.

The Supreme Court explained in 2021’s Collins v. Yellen that plaintiffs must show some harm to qualify for injunctive relief related to officials who were constitutionally appointed but are unconstitutionally insulated from dismissal by the president, Wiener said in a partial dissent.

Excusing plaintiffs from alleging some causal harm from the unconstitutional job safeguards brings the Fifth Circuit in conflict with the Supreme Court and the Second, Sixth, and Tenth circuits, he said.

SpaceX is represented by Morgan, Lewis & Bockius LLP. Energy Transfer is represented by Hunton Andrews Kurth LLP. Findhelp is represented by Jackson Lewis PC. The NLRB is represented by agency attorneys.

Lawyers for the companies didn’t immediately respond to requests for comment. An NLRB spokesperson declined to comment.

The cases are Space Exploration Technologies v. NLRB, 5th Cir., No. 24-50627, 8/19/25, Energy Transfer LP v. NLRB, 5th Cir., No. 24-40533, 8/19/25, and Aunt Bertha v. NLRB, 5th Cir., No. 24-10855, 8/19/25.