5th Circ. Declines to Halt SpaceX Appeal in its Constitutional Challenge to the NLRB

July 23, 2024
Hall Benefits Law, LLC

The U.S. Court of Appeals for the Fifth Circuit will continue to consider whether a Texas federal court judge must stay an administrative suit against SpaceX before the National Labor Relations Board’s (NLRB) in-house Court. The NLRB requested that the Fifth Circuit pause its deliberations on the issue, stating that it now agrees to the injunction requested by SpaceX to stay the in-house administrative proceedings. However, SpaceX asked the Fifth Circuit to continue its deliberations, stating that it wanted a ruling on the lower Court’s “effective denial” of its injunction request and dismissing the NLRB’s acquiescence as “merely a ploy.”

The case is Space Exploration Technologies Corp. v. National Labor Relations Board et al., case number 24-40315, U.S. Court of Appeals for the Fifth Circuit.

The NLRB filed an administrative suit against SpaceX earlier this year, alleging that the company violated the National Labor Relations Act (NLRA) by firing any workers who criticized Elon Musk. In response, SpaceX filed a constitutional challenge to the structure of the NLRB, arguing that the agency could not act simultaneously as a prosecutor, judge, and lawmaker. As part of that suit, SpaceX asked for an injunction staying the administrative suit that the NLRB had filed against it pending the outcome of the constitutional challenge. When the judge did not rule on the injunction request by the date SpaceX demanded, which was a hearing date in the administrative suit, the company filed an appeal on the “effective denial” of its injunction request.

The labor law industry is watching closely SpaceX’s constitutional challenge to the NLRB structure, which some experts believe may be successful. The Fifth Circuit’s 2022 ruling in Jarkesy v. SEC, currently before the U.S. Supreme Court, relied on a similar argument in finding the in-house administrative Court of the U.S. Securities and Exchange Commission (SEC) unconstitutional.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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