The case itself reads like a Gilded Age parable. South African–born billionaire Elon Musk, the world’s wealthiest man, had asked the court to block the board’s enforcement actions against one of his companies for its alleged anti-union activities. A panel of three Republican-appointed federal judges in Texas, two of whom were appointed by President Donald Trump, agreed with him.
Tuesday’s ruling in SpaceX v. NLRB is a significant blow to American workers who hope to organize their workplaces without fear of retaliation. It represents a partial negation of the New Deal, along with 90 years of legal precedent—and a victory for the conservative legal establishment’s war against federal regulatory power.
The NLRB’s structure is laid out by the National Labor Relations Act of 1935, a New Deal–era law that enshrined a range of new legal protections for organized labor in the private sector. Two months before the NLRA’s passage, the Supreme Court had ruled in Humphrey’s Executor v. United States that Congress could lawfully enact for-cause removal protections for the heads of independent agencies under certain conditions. This legal and constitutional backdrop remained intact for the last 90 years.
That view was given an official imprimatur by the 2020 case Selia Law v. Consumer Financial Protection Bureau. The court’s conservative majority struck down the for-cause removal provision that prevented Trump from dismissing the CFPB’s director. Chief Justice John Roberts distinguished the CFPB from other independent agencies that fell under Humphrey’s Executor (like the Federal Trade Commission and the Securities and Exchange Commission) by noting that those agencies were headed by multi-member boards instead of a single appointee.
The ruling achieved a major right-wing policy goal—defanging and disrupting the CFPB’s functions—while also avoiding more far-reaching consequences to other agencies. The FTC and SEC remained untouched. More importantly, so did the Federal Reserve Board of Governors, which wields enormous power over both U.S. and international financial systems. Many court watchers assume that the justices were unwilling to undermine the Fed’s independence—especially under Trump, a frequent Fed critic—because of the serious economic consequences that could follow.
“All the officers who headed the FHFA during the time in question were properly appointed,” Justice Samuel Alito wrote for the court. (Emphasis his.) “Although the statute unconstitutionally limited the President’s authority to remove the confirmed Directors, there was no constitutional defect in the statutorily prescribed method of appointment to that office.” As a result, he concluded, the plaintiffs could not argue that the challenged action was automatically invalid.
Much of the panel’s analysis echoes that of the Supreme Court’s rulings in Selia Law and related cases: The president’s removal power is broad, Congress can only limit it in certain narrow circumstances, and the NLRB does not fall under those exceptions because, among other reasons, it wields “substantial executive power” unlike the agencies at issue in Humphrey’s Executor.
“The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power,” the justices wrote in an unsigned opinion, also referring to another agency where a fired board member was suing Trump over their ouster. “But we do not ultimately decide in this posture whether the NLRB or MSPB falls within such a recognized exception; that question is better left for resolution after full briefing and argument.”
There is little reason to doubt that the Supreme Court will eventually side with Willett on the merits. The court’s conservative majority has made its antipathy toward for-cause removal protections, even for multi-member boards covered by Humphrey’s Executor, clear in Wilcox and in another shadow-docket case in June involving members of the Consumer Product Safety Commission. They even invented a bespoke exemption out of whole cloth for the Federal Reserve in Wilcox to avoid any complications there.
That is not what the Fifth Circuit did in SpaceX. The NLRB argued that if the court ruled against the for-cause protections for that agency as well, then severability would be the best course. Instead, Willett distinguished the case from Selia Law and Collins by noting that those cases had reached the court on the merits, whereas this one was in a preliminary-injunction stage. As a result, he blocked the agency from operating against the plaintiffs altogether.
The Supreme Court may eventually alter that portion of the decision down the road and allow the agency to continue to operate in some form. But the damage is already done. Wilcox’s dismissal left the agency without a quorum to operate with new cases involving unfair labor practices, and the Fifth Circuit’s ruling blocked its ability to work on ongoing ones. Thanks to the Roberts court’s enthusiasm for the unitary executive theory, Trump and Musk have nullified a central pillar of the New Deal and weakened workers’ ability to organize without facing illegal retaliation.
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