SpaceX’s Court Victory Paves Way for a Labor Movement Revival

SpaceX’s federal appeals court win Aug 19 imperils the constitutionality of the National Labor Relations Act, the law which has governed relations between unions and employers for more than 90 years.

The US Court of Appeals for the Fifth Circuit ruled that job protections for the National Labor Relations Board, and the administrative law judges it employs, are most likely unconstitutional. If the ruling holds, these previously independent officials will serve at the pleasure of a US president who can fire them at will and has appointed officials who once represented interests that are hostile to organized labor.

Several commentators have claimed that this ruling will hinder efforts to protect workers seeking to organize. I have a different take. The Fifth Circuit’s ruling could lead to the labor movement’s revival by striking down the NLRA’s restrictions on secondary boycotts, refusals to handle “hot cargo,” and recognitional picketing.

I have argued if the Supreme Court follows the Fifth Circuit’s example and rules that the president can fire ex-NLRB member Gwynne Wilcox without cause, despite the NLRA saying otherwise, then all of the law’s prohibitions on employer and union conduct must fall. A history lesson will help prove the point.

When US Sen. Robert Wagner and other supporters of the NLRA designed the law in the 1930s, then-President Franklin Roosevelt was at the height of his electoral powers. Despite his popularity, the drafters rejected housing the labor board within the Department of Labor because they felt that the new agency should remain independent of the President.

Instead, they created a separate agency that could issue binding orders and ensure labor peace. I contend that this independence was so central to the design of our national labor scheme that if a court were to find that the president can fire NLRB members, then it appears Congress would prefer the courts set aside the entire NLRA rather than limp along with a board subject to procedural control.

In other words, the Congress of that time would have preferred a “law of the jungle” to a politically captive board. Employers think the NLRA only protects unions, but the reality is that it protects their interests more than they give it credit for.

Think about this: Almost 70% of people want to be in a union, yet only 6% of the private sector are in a union. There is a lot of interest in joining a union, but employers have mastered a playbook at defeating union organizing drives and have almost beat unions into extinction.

If the NLRA is ruled unconstitutional, then states can create their own regimes to regulate collective bargaining. As Cornell professor Gali Racabi demonstrates, 19 states from across the political spectrum have laws that protect collective bargaining if a court strikes down the NLRA that come immediately into effect.

Unions could boycott neutral companies to pressure other companies that they’re combatting to settle without legal sanction. Dockworkers could refuse to handle goods that are subject to a labor dispute without sanction. While state laws prohibiting these actions would remain in effect, bans on these activities would no longer be national in scope.

The potential for labor unrest and strife would be massive, and a tactical toolbox for labor to exploit would open up. However, in the “law of the jungle,” employers could access new tactics to squelch nascent organizing campaigns.

For example, they would be able to fire labor activists legally in many states without running afoul of antidiscrimination laws or lock out workers who go on strike. The potential for mischief and unrest would be vast.

The Fifth Circuit, in ruling that the NLRA is constitutionally infirmed, ducked the question about whether it should strike down the entire law on the basis that it is too soon to rule on that question. In the near term, this decision is sure to handicap any organizing at SpaceX’s facilities and provide the company with another tool to delay organizing at their facilities.

However, the US Supreme Court will have to answer whether the NLRA’s removal of protections can be severed from the rest of the law. This question is not only one of technical importance, but it also may decide the future of the labor movement and impact its ability to seek renewal.

The case is Space Exploration Technologies v. NLRB, 5th Cir., No. 24-50627, 8/19/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Alvin Velazquez is an associate professor who teaches labor, bankruptcy, and corporate law at the Indiana University Maurer School of Law.

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