Lawyers for Amazon and Elon Musk’s SpaceX argued before a federal appeals court on Monday that the structure of the National Labor Relations Board is unconstitutional, pushing forward a legal battle that could last into the Trump administration, where Musk is expected to oversee bureaucratic cost-cutting .
A three-judge panel at the 5th U.S. Circuit Court of Appeals in New Orleans heard separate oral arguments in the lawsuits brought by SpaceX and Amazon, which the two companies brought after the labor agency filed complaints against them in disputes over workers’ rights and union organizing.
A ruling in favor of the companies could immensely weaken — or cripple — the nearly century-old agency tasked with enforcing labor laws and resolving labor-related complaints by employees against their employers. The issue could eventually reach the U.S. Supreme Court, which has a conservative majority and has issued rulings limiting the power of government agencies.
The three appeals judges who heard Monday’s arguments questioned the legal maneuvers by Amazon and SpaceX to bring their cases to the 5th Circuit, where jurists nominated by Republican presidents dominate the appeals court.
An NLRB attorney emphasized during the hearing that both companies filed their appeals after lower courts failed to rule within the required timeframes.
Michael E. Kenneally, a lawyer for SpaceX, countered that the government “relied so heavily on procedural objections” because of the alleged weakness of its legal argument, an assertion that drew some pushback from the panel.
“That sounds to me like the argument ‘Procedure doesn’t matter if I win on the merits,'” said Judge James E. Graves Jr., an appointee of former President Barack Obama.
SpaceX, Musk’s space technology company, filed suit against the NLRB in January after the labor agency accused the company of unlawfully firing employees who wrote an open letter critical of Musk and creating the impression that the activities of workers would be monitored.
Among other things, the company argued in its complaint that an agency process deprived it of the right to a jury trial.
Musk, the world’s richest person, has become more influential in recent months after pumping an estimated $200 million through his political action committee to aid elect Donald Trump as president.
After his election, Trump tapped Musk and former Republican presidential candidate Vivek Ramaswamy to lead a up-to-date efficiency commission focused on cutting costs across the federal government. Musk said the up-to-date administration will be “charged with removing the mountain of stifling regulations that do not serve the common good.”
Amazon’s lawsuit against the NLRB is related to the company’s objections to a union election held at a warehouse in New York City in April 2022. The company sought to rehire an organizer fired shortly before the vote began.
Ultimately, the Amazon Labor Union won the employee representation election, but Amazon refused to come to the negotiating table.
The company’s lawyers argued in the lawsuit that the NLRB board members who approved the agency’s complaint later “acted as judges” by refusing to review Amazon’s objections, which had also been presented to them. Amazon’s lawyers claimed the agency’s structure was unconstitutional because board members were protected from removal by the U.S. president, among other things.
In a statement issued before Monday’s hearing, Jennifer Abruzzo, NLRB general counsel, said it is “nothing new for large companies to challenge the NLRB’s authority to enforce workers’ rights to avoid being held accountable for their labor law violations.” “.
