Insights
NLRB Faces New Constitutional Challenge, as Amazon Joins the Fight
February 20, 2024
The list of employers challenging the National Labor Relations Board (“NLRB”) grew again last week, as Amazon joined the likes of SpaceX, Starbucks, and Trader Joe’s in arguing that the NLRB is unconstitutional.
In an answer to a Board charge, Amazon asserted that the structure of the NLRB is unconstitutional because it violates the separation of powers because the president cannot remove NLRB members or administrative law judges (“ALJ”). Even further, Amazon argued that proceedings before the Board violate Article III of the U.S. Constitution and the Seventh Amendment because these proceedings deprive companies of their right to a jury trial.
SpaceX has taken the fight one step further by filing a separate lawsuit against the NLRB after the agency brought a charge against it alleging that the company fired 8 workers who had signed and circulated an open letter critical of Elon Musk. The suit, which was filed in the U.S. District Court for the Southern District of Texas, argues that the National Labor Relations Act improperly impedes the president’s authority to remove executive officers; challenges the Board’s members’ removal protections; attacks the juryless trial system; and argues that the NLRB violates SpaceX’s right to due process because the Board can prosecute and decide a case and reshape federal labor policy in the process, thereby unconstitutionally acting as a legislative, executive, and judicial body, all in one. That case has since been transferred to California.
These arguments echo those asserted by various companies seeking to challenge the constitutionality of not only the NLRB but other federal agencies as well. These arguments seem to have drawn the interest of the Supreme Court, as just late last year the Court received arguments on the Securities and Exchange Commission’s in-house adjudicative process.
What does this mean for the NLRB and other federal agencies? It’s really too soon to tell. On the one hand, dismantling an 89-year-old administrative structure would throw the administrative state and labor market into a state of chaos, but on the other hand, these companies may have a more receptive judicial audience than in years past. Or the courts may determine that the protections afforded the Board members and ALJs are unconstitutional and simply empower the president to be able to fire at will—which surely will not quell criticisms of the Board’s already major policy swings when the administration changes.
This is but one of many labor developments that Jackson Kelly PLLC is monitoring. As always, if you have any questions regarding this development or labor law in general, please contact a member of the Jackson Kelly Labor and Employment Team.