(CN) — A federal judge in Texas on Tuesday cast new doubt on the National Labor Relations Board’s ability to oversee labor disputes, agreeing with Elon Musk’s SpaceX that the agency’s board members and administrative law judges are likely serving unconstitutionally.
SpaceX faces a range of labor complaints, including at least two complaints to the NLRB, amid a broader conservative push to limit the power of federal regulatory agencies. Along with SpaceX, other major companies including Amazon and Starbucks have filed legal challenges to the NLRB’s authority.
In one complaint against SpaceX, filed in 2022, an anonymous worker argued that clauses in the company’s severance contracts violate labor laws. Included in those contracts is a strict non-disparagement clause that bars ex-workers from making any negative comments about the company. Another clause prohibits workers from participating in any kind of litigation or complaint against the company “unless compelled to do so by a valid subpoena or court order.”
The NLRB agreed these clauses interfered with employee rights protected by the 1935 National Labor Relations Act. Finding that the worker’s claims had merit, the agency in March issued a complaint and notice of hearing against the company.
SpaceX then filed suit against the NLRB and several top officials in April in the U.S. District Court for the Western District of Texas. Although the company operates a test facility in the district, neither its corporate headquarters nor its Starbase launch facility is located there.
In its April complaint, SpaceX noted that NLRB board members and administrative law judges — like many federal civil servants — are nonpolitical appointees and therefore can’t be fired at-will by the president. The company claims the board members therefore are “unconstitutionally insulated from the president’s oversight,” making the board’s action an unlawful attempt to “subject SpaceX to an administrative proceeding.”
In an order on Tuesday, U.S. District Judge Alan Albright agreed. Finding SpaceX was likely to succeed on its claims that NLRB officials were serving unconstitutionally, he issued an injunction blocking the NLRB hearing.
Albright, a Donald Trump appointee, acknowledged in his order that “there is a strong public interest in providing employees a mechanism to vindicate their NLRA rights.” Nonetheless, he found that “Congress exceeds its power when it attempts to neuter the president’s constitutional power to remove and control executive officers.”
“Nothing in the injunction granted here prevents Congress from using a constitutional means to achieve its goals,” Albright wrote.
In practice, though, the decision makes it much more difficult for workers to bring regulatory complaints against their employers. The NLRB has already paused its enforcement action against SpaceX, after Albright earlier this month indicated how he would rule.
The NLRB is hardly the only federal regulator currently in the crosshairs of big business. In Loper Bright Enterprises v. Raimondo, the Supreme Court last month overturned the longstanding Chevron doctrine, which held that judges should defer to agencies in cases where regulatory laws are ambiguous.
That legal challenge was shepherded by the Americans for Prosperity Foundation, a conservative think tank that advocates for limited government. Liberal justices dissented from the decision, and experts warned it would undermine the federal government’s ability to protect consumers, workers and the environment.
“This is especially valuable for conservative judges who are inclined towards striking down regulations,” Sam Sankar with the environmental nonprofit Earthjustice told Courthouse News after the decision. “If they had a knife before, they have a chainsaw now.”
Meanwhile, Project 2025, a influential policy guide geared towards future Republican administrations, proposes reclassifying thousands of federal workers as political appointees. Such a change could give the president power to limit regulatory actions he or she disagrees with — for example, by firing Environmental Protection Agency officials who pursued certain environmental cases.
These proposals mirror SpaceX’s argument that federal civil servants should serve at the discretion of the president.
Like Loper Bright, the lawsuit also tests the authority of federal regulators.
Morgan Lewis, the firm that represented SpaceX in the challenge, advertises on its homepage that it can help businesses navigate regulatory challenges post-Chevron, including by “challenging existing agency rules and orders.” The law firm did not respond to requests for comment by press time.
SpaceX’s decision to sue in the Western District of Texas, where it has a limited presence, could prompt complaints of forum-shopping, in which plaintiffs seek out judges they think will give them favorable rulings.
Albright, who joined the Western District of Texas in 2018, has faced such criticisms before. As Courthouse News reported in 2022, Albright publicly advertised himself as the go-to judge for patent cases, even urging members at a American Intellectual Property Law Association meeting in 2019 to file cases with his court. By 2020, more than 20% of all patent cases nationwide were before Albright, prompting bipartisan concern from lawmakers and a federal court order reassigning patent cases.