SpaceX Bid to Keep Labor Suit in Texas Denied by 5th Circuit (2)

SpaceX’s bid to keep its lawsuit against the US National Labor Relations Board in Texas was denied by a federal appeals court, a setback for Elon Musk’s aerospace company in its battle with the agency.

Tuesday’s order, by a three-judge panel of the 5th US Circuit Court of Appeals, came after the company sued the NLRB in January, seeking to have its structure declared unconstitutional. It sued the day after the agency issued a complaint accusing SpaceX of illegally retaliating by firing eight employees who had circulated an open letter critical of Musk.

A US district court judge last month ruled that the case should be transferred to California, and SpaceX appealed.

A SpaceX rocket in Cape Canaveral, Florida.

Photographer: Joe Raedle/Getty Images

Conservative Court

Musk’s companies have repeatedly gone to the New Orleans-based 5th Circuit in their challenges to the NLRB. The 5th, which includes Texas, is regarded as one of the most conservative of the federal appeals courts.

SpaceX headquarters and the NLRB region that brought the case against Musk’s company are both based in California. But SpaceX argued that Texas was an appropriate venue for its lawsuit because its facilities there were disrupted by the ex-employees’ letter and would be affected by the remedies the NLRB is seeking in its complaint.

Read More: SpaceX Sues US Labor Board Over Fired Employees Case

SpaceX didn’t immediately respond to a request for comment on the appeals court order. But at an NLRB hearing on Tuesday, SpaceX’s lawyer Harry Johnson told an agency judge that the company was weighing its legal options.

“We’re considering what to do at this point” about the order, including whether to ask for the matter to be reconsidered by a larger group of the 5th Circuit’s judges, Johnson said.

The NLRB declined to comment.

California All the Way

On Feb. 15 a federal judge in southern Texas ruled that the case belonged in California rather than in his courtroom. The case “concerns a California administrative proceeding regarding the actions of a California company and its California employees in California,” US District Judge Rolando Olvera wrote. SpaceX asked the 5th Circuit to intervene.

Tuesday’s one-sentence order itself didn’t offer a rationale, but one of the three judges hearing the case, George W. Bush appointee Jennifer Walker Elrod, dissented.

The order “permits an erroneous view of the requirements for filing claims in our circuit, risks confusion amongst the district courts of our circuit, and deprives plaintiffs of the opportunity to seek justice in a lawful venue,” Elrod wrote.

One of the two judges in the majority is also a George W. Bush appointee. The other was named to the bench by President Joe Biden.

A lawyer for the fired workers, Laurie Burgess, called SpaceX’s argument meritless.

“We are pleased that the Fifth Circuit has affirmed the lower court decision and rejected SpaceX’s spurious claim to have this matter heard in Texas, an improper venue,” Burgess said.

The case is In re Space Exploration Technologies Corp., 24-40103, 5th US Circuit Court of Appeals.

(Adds details, context and responses in second and third sections.)

--With assistance from Madlin Mekelburg.

To contact the reporter on this story:
Josh Eidelson in Palo Alto at jeidelson@bloomberg.net

To contact the editors responsible for this story:
Brian Bremner at bbremner@bloomberg.net

Peter Jeffrey

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