SpaceX Lawsuit Opposes Authority of National Labor Relations Board

HOUSTON — SpaceX sued the National Labor Relations Board Thursday in a lawsuit that seeks to undercut the agency’s fundamental authority to rule in workplace disputes.

SpaceX hit back with the lawsuit one day after the NLRB filed a labor complaint against the company. 

The NLRB says eight employees were improperly fired after they criticized chief executive officer Elon Musk for sexually charged remarks he posted on social media.

The SpaceX lawsuit says the NLRB lacks constitutional authority because the agency does not allow parties to legal disputes the right to jury trials. The space technology company seeks an injunction against the NLRB.

A win for SpaceX would undermine the authority of many federal agencies that Congress allows to adjudicate regulatory issues.

“The NLRB’s current way of functioning is miles away from the traditional understanding of the separation of powers,” says the lawsuit filed in federal court for the southern district of Texas.

The NLRB is an independent federal agency that protects the rights of private sector employees to organize to improve their wages and working conditions, with or without union representation.

The agency cited SpaceX after its management staff allegedly questioned, monitored and punished employees who participated in writing an open letter to SpaceX executives.

The employees were responding to Musk’s posts on X  in which he denied or joked about a SpaceX worker’s allegations her boss exposed himself and propositioned her.

The 2022 letter criticized Musk “for issuing inappropriate, disparaging, sexually charged comments on Twitter.”

The employees also said Musk’s words and actions appear to violate the company’s policies on diversity and workplace misconduct. The letter called on SpaceX officials to condemn Musk’s actions.

Instead, company officials said employees could “quit if they disagreed with the behavior of Chief Executive Officer Elon Musk,” according to the NLRB’s complaint against SpaceX.

SpaceX’s lawsuit says the NLRB’s procedures for handling complaints by employees violates the Seventh Amendment’s right to a jury trial in federal civil matters. Persons or organizations cited by the agency are entitled to administrative hearings but they normally are held before some of the same officials who decide whether to prosecute them.

SpaceX’s attorneys relied heavily on the reasoning used by the plaintiffs in the pending Supreme Court case of Jarkesy v. Securities and Exchange Commission.

It quotes from a lower court ruling in the Jarkesy case to say, “The right to trial by jury ‘is a fundamental component’ of the American legal system and ‘remains one of our most vital barriers to governmental arbitrariness.’”

In addition, the limited power the executive branch of government can exert over the independent federal agency violates separation of powers provisions in the Constitution, the lawsuit says.

SpaceX’s lawsuit says, “the NLRB is also unconstitutionally structured because its members exercise all three constitutional powers — legislative, executive and judicial — in the same administrative proceedings.”

If the five-member NLRB decides SpaceX violated labor laws, it could order the fired workers reinstated and that they receive back pay. SpaceX also could be fined.

The case of the eight fired workers is only the latest labor problem Musk and his companies have faced in recent years.

In November, Reuters reported on at least 600 workplace injuries at the SpaceX facility in Hawthorne, Texas, from what employees called a lax safety culture. They blamed some of the head injuries, electrocutions and crushed limbs on SpaceX’s failure to block off dangerous machinery and work areas and Musk’s dislike for bright yellow safety colors.

In October, the NLRB issued a complaint against X after what the agency said was an illegal firing of an employee who criticized the social media company’s return-to-office policy.

Musk’s electric vehicle company Tesla has been targeted with several NLRB complaints over company officials who allegedly tried to block union organizing or who overlooked racial discrimination at its factories.

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