Elon Musk’s Space X, with two other companies, has this week won a court ruling that has found the US National Labor Relations Board (NLRB) structurally unlawful. The ruling has also blocked the board from pursuing cases against them.
The court decision, made by the US Fifth Circuit Court of Appeals, one of the appellate courts just below federal Supreme Court level, found that a law shielding the board’s members from being removed at will by the US president is illegal.
“Because the executive power remains solely vested in the president, those who exercise it on his behalf must remain subject to his oversight,” wrote circuit judge Don Willett, an appointee of President Donald Trump, said.
The Fifth Circuit upheld decisions by three judges in Texas that blocked NLRB cases alleging illegal labour practices by SpaceX, pipeline operator Energy Transfer and Aunt Bertha, which operates a social services search engine, pending the outcome of their lawsuits.
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Jeff Bezos, executive chairman of Amazon, has also launched action against the NLRB.
“The employers have made their case and should not have to choose between compliance and constitutionality,” wrote Willett.
SpaceX has a separate pending lawsuit against the NLRB seeking to block a different case at the board.
The NLRB, which was designed to be independent from the White House, is the only federal agency that considers private-sector labour disputes.
The agency’s general counsel can issue complaints against employers or unions that are heard by administrative judges, whose decisions can be appealed to the board. There is no direct equivalent in the UK but Acas carries out some functions similar to those of the NLRB.
Robert Reich, labor secretary in the cabinet of President Bill Clinton, said the ruling could be the “death knell” for some unions, as it effectively overturns a cornerstone of President Roosevelt’s New Deal – the National Labor Relations Act 1935 – that gave unions the right to organise. A similar attempt to declare the NLRB’s work unlawful was made in 1937 by the Jones & Laughlin Steel Co, but it failed.
The five-member board has been paralysed and unable to issue decisions since President Trump in January fired two NLRB members, including President Biden appointee Gwynne Wilcox. It was the first time a board member had ever been removed by a president. Board members were only supposed to be removed by the president for “neglect of duty or malfeasance in office”. As of mid-February 2025, the board has not stated when it intended to have a quorum again.
Wilcox has challenged her removal in the courts, which was initially successful until the Supreme Court, which is dominated by Trump appointees, intervened and blocked her reinstatement.
As things stand, NLRB investigations, including 24 into Elon Musk’s companies, cannot move forward until the president nominates new members.
Earlier this year, Musk’s unofficial Department of Government Efficiency (Doge) raided NLRB offices, gaining access to confidential information and installing their own software to gain access to records. Shortly after this – within minutes – it is alleged that the NLRB began detecting suspicious login attempts from Russian IP addresses using the precise login credentials created by Doge.
Traditionally, the US Courts of Appeals serve as gatekeepers to the Supreme Court and comprise three judges randomly selected from a pool of often ideologically diverse jurists. They are supposed to review district court decisions with a degree of caution and procedural care. The circuit court of appeals for the fifth circuit, which serves Texas, Louisiana and Mississippi, has however begun to issue rulings that advance right-wing policy positions, inviting the currently right-leaning Supreme Court to take sweeping action to roll back laws on abortion rights, gun laws, voting rights, labor unions, the separation of church and state, and affirmative action.
Reich added that the NLRB has charged companies owned by Musk and Jeff Bezos with “hundreds of violations of workers’ rights.” He said they had “fired pro-union workers, retaliated against union organisers by cutting their hours, closed stores that tried to unionise and denied benefits to non-union workers and refused to bargain. And now Musk and Bezos are going after the referees so workers don’t stand a chance.”
In 2023, Musk commented that he disagreed with “the idea of unions”, describing it as a “lords and peasants” scenario. His car business Tesla has faced industrial action across the world, particularly within the US and in Scandinavia.
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