US Labor Board Gives Up Oversight of Musk’s SpaceX

The US labor board is abandoning a yearslong legal battle against Elon Musk’s SpaceX and signaling it will steer clear of future cases against the company.

Two years after issuing a complaint accusingthe aerospace firm of firing eight engineers because of their involvement in an open letter criticizing Musk, the National Labor Relations Board said it was dismissing the case.

In a letter to the attorneys of the former employees, the labor board cited a recent opinion issued by a separate agency, the National Mediation Board, arguing that SpaceX engineers belonged under its jurisdiction rather than the NLRB’s.

“Accordingly, the National Labor Relations Board lacks jurisdiction over the Employer and, therefore, I am dismissing your charge,” Danielle Pierce, a regional director of the agency, wrote in the letter seen by Bloomberg.

The NMB oversees railroad and airline companies such as American Airlines Group Inc., while the NLRB oversees most other private sector employers, including manufacturers like Boeing Co.

The retreat by the NLRB is a victory for SpaceX, with former and current employees now having less legal recourse when alleging retaliation.

Under federal law, workers covered by the NLRB have a right to participate in a wide range of collective action aimed at improving their working conditions, with or without a union. Workers under NMB jurisdiction are covered by a different law, which lacks equivalent protections.

“The legal system doesn’t feel like it’s working like it’s supposed to, and it doesn’t feel like it’s protecting workers the way it’s supposed to,” said Paige Holland-Thielen, one of the fired engineers. “I think that this is a sign of worse things to come in declawing the NLRB.”

An NLRB spokesperson declined to comment. SpaceX, which has denied wrongdoing, did not immediately respond to an inquiry.

SpaceX had responded to the NLRB’s 2024 complaint by suing the agency, arguing that its structure was unconstitutional. That lawsuit had led to an injunction from the 5th Circuit Court of Appeals pausing the labor board’s case against the company.

Jennifer Abruzzo, NLRB general counsel under former President Joe Biden, had rejected SpaceX’s claim that allegations against the company should be handled by the NMB. After President Donald Trump fired her in January last year, SpaceX asked the labor board to reconsider the issue.

The NLRB general counsel office in April said it had decided to seek the mediation board’s view “in the interests of potentially settling” the disputes with SpaceX.

The fired engineers argued SpaceX did not belong under the NMB because Congress never gave the agency jurisdiction over commercial space transportation, and because unlike airlines serving the general public, SpaceX offers rides only to “hand-picked customers.” But in a Jan. 14 opinion, the NMB sided with SpaceX, saying the company belonged under its jurisdiction because “space transport includes air travel” to get to outer space, and because the company’s website lets anyone email it to try to purchase a trip.

The NLRB in December abandoned another Biden-era case against SpaceX, in which the agency had alleged terms in the company’s severance and arbitration agreements, including confidentiality rules, were illegally coercive.

While the NLRB’s latest reversal is likely to resolve SpaceX’s ongoing lawsuit against the agency, the labor board still faces other challenges to its constitutionality: Since SpaceX filed its lawsuit in 2024, other companies including Amazon.com Inc. have filed similar cases, several of which are now pending in US courts.

The fired engineers have also sued SpaceX and Musk for sexual harassment and retaliation under California law. That lawsuit includes allegations that some of the plaintiffs experienced harassing comments from coworkers that “mimicked Musk’s posts” on social media and “created a wildly uncomfortable hostile work environment.”

SpaceX in December asked a federal appeals court to force that case into arbitration, after a lower court refused to do so.

To contact the author of this story:
Josh Eidelson in San Francisco at jeidelson@bloomberg.net

To contact the editor responsible for this story:
Bruce Einhorn at beinhorn1@bloomberg.net

Anne Cronin

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