Elon Musk’s SpaceX Sues US Agency, Alleging ‘Unconstitutional’ Structure

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SpaceX hits National Labor Relations Board after board accuses company of illegally firing workers.

Elon Musk’s SpaceX has sued a federal agency, alleging it should be dramatically reworked because its structure is unconstitutional.

The National Labor Relations Board (NLRB) has judges hear cases it brings against companies as part of its mission to protect the rights of workers at private companies. A complaint it lodged against SpaceX in December 2023 is being sent to one of the judges for adjudication.

But these administrative law judges function unconstitutionally, SpaceX said in the new lawsuit.
The U.S. Constitution requires the president to have “sufficient control” over the judges, and an appeals court concluded in 2022 that administrative law judges (ALJs) in the Securities and Exchange Commission (SEC) are unconstitutionally shielded from presidential oversight.

“The same reasoning applies to the ALJs of the NLRB, including the ALJ assigned to preside over the pending NLRB proceedings against SpaceX,” SpaceX said in the Jan. 4 suit.

The company is asking the U.S. District Court for the Southern District of Texas to rule that the current makeup of the NLRB is unconstitutional.

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“To prevent SpaceX from undergoing protracted administrative proceedings before an unconstitutionally structured agency—after which SpaceX is unlikely to have a chance to secure meaningful retrospective relief—the court should stay or enjoin the current agency proceedings, declare that the NLRB’s structure violates the separation of powers under Article II of the Constitution, and permanently enjoin the NLRB and its general counsel from pursuing unfair labor practice charges against SpaceX before agency officials that are unconstitutionally insulated from presidential oversight,” the company wrote.

SpaceX also said that the NLRB’s five-member board is improperly structured, calling it “the very definition of tyranny.”

U.S. District Judge Rolando Olvera, an appointee of former President Barack Obama, was assigned to the case.

“We don’t have any comment on the lawsuit,” an NLRB spokeswoman told The Epoch Times via email.

The suit came after the NLRB charged that SpaceX violated federal law by firing workers who spoke out against the company’s practices.

The workers penned an open letter to SpaceX leadership in 2022, taking issue with Mr. Musk’s posts on Twitter. They said that Mr. Musk’s posts were “a frequent source of distraction and embarrassment for us” and that it should be made clear that “his messaging does not reflect our work, our mission, or our values.”

SpaceX, in a “wave of wrongful retaliatory terminations,” fired workers who wrote the open letter and others involved in activity protected by the National Labor Relations Act, such as workers who protested against what they described as sexual harassment in the company, NLRB officials said.

Deborah Lawrence, one of the workers whom SpaceX fired, told news outlets in a statement through her lawyers that the company has a “toxic culture.”

“We wrote the open letter to leadership not out of malice, but because we cared about the mission and the people around us,” she said.

As of now, a hearing in the matter is scheduled to take place on March 5 in Los Angeles, California, before an administrative law judge. A decision by the judge can be appealed to a federal court.

A SpaceX Falcon 9 rocket, with the Dragon capsule and a crew of four private astronauts, lifts off from pad 39A at the Kennedy Space Center in Cape Canaveral, Fla., on May 21, 2023. (John Raoux/AP Photo)
A SpaceX Falcon 9 rocket, with the Dragon capsule and a crew of four private astronauts, lifts off from pad 39A at the Kennedy Space Center in Cape Canaveral, Fla., on May 21, 2023. (John Raoux/AP Photo)

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The NLRB is one of several government agencies that have brought actions against Mr. Musk after he became a critic of President Joe Biden and the federal government.

The U.S. Department of Justice (DOJ) in August 2023 sued SpaceX, saying the company illegally only hired U.S. citizens and permanent residents. A countersuit in the same federal court in which the new suit was brought said the company was complying with federal law that governs companies involved with sensitive technology.

Judge Olvera ruled in favor of SpaceX and paused the case, finding that the way the DOJ’s administrative law judges act does not adhere to the Constitution.

The proceedings before the judges “are unconstitutional because the attorney general is not allowed to review” their decisions, he said.

The Constitution says presidents must appoint federal “principal officers,” although Congress can authorize the head of departments to appoint “inferior officers.” Those inferior officers, though, must be “directed and supervised” by a principal officer. The judges are not inferior officers because they’re not supervised, according to the ruling.

If the proceedings were not paused, SpaceX “will likely suffer irreparable injury,” Judge Olvera added.

He also addressed how the judges cannot be directly removed by a president. Judges can only be removed by board members, who themselves can be removed by a president. That structure may be unconstitutional but the removal restrictions are severable by the courts, he said.

The appeals court in the SEC case, which is set to be heard by the U.S. Supreme Court, found that because presidents cannot directly remove the administrative law judges, they are unconstitutionally insulated from the chief executive.

A judge who dissented disagreed, creating a split decision that the nation’s top court will resolve.

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