SpaceX’s NLRB Challenge Will Not Be Stayed by Fifth Circuit

Space Exploration Technologies Corp. may continue to pursue its interlocutory appeal in the Fifth Circuit of a ruling in a suit challenging the constitutionality of the National Labor Relations Board.

SpaceX is facing an administrative action in the NLRB for allegedly firing employees who criticized owner Elon Musk. It filed its appeal in the Fifth Circuit after it was denied a preliminary injunction in the underlying suit.

The NLRB asked the Fifth Circuit to stay any further briefing in the appeal, pending a dispositive ruling from the district court. The motion made the request to “avoid unnecessary expense and inconvenience of briefing by the parties in an appeal which may very well be rendered moot by the district court’s entry of an order granting, in substance,” the relief requested by SpaceX.

In a June 12 order signed by Judge Carl E. Stewart, the US Court of Appeals for the Fifth Circuit denied the NLRB’s motion.

SpaceX’s complaint in the underlying suit said that the administrative structure of the NLRB violates Article II of the US Constitution because the president doesn’t maintain sufficient removal control of the agency’s administrative judges.

NLRB proceedings also deny individuals the right to a jury trial in violation of the Seventh Amendment, SpaceX’s complaint said.

SpaceX alleges that the NLRB’s structure violates the separation of powers because its members exercise all three constitutional powers—legislative, executive, and judicial—in the same administrative proceedings.

Morgan, Lewis & Bockius LLP represents SpaceX.

The case is Space Exploration Tech. Corp. v. Nat’l Labor Relations Bd., 5th Cir., No. 24-40315, order filed 6/12/24.