“Happy Labor Day” sounds especially off-key this year because the National Labor Relations Board is on the ropes. The NLRB is the government agency that adjudicates private-sector disputes between labor and management. It oversees union elections and punishes labor law violations (excepting wage theft, which is policed by the Labor Department). Sustaining organized labor even at its severely depressed current level would be impossible without a functioning NLRB. But last week, the Fifth Circuit Court of Appeals ruled the NLRB’s 90 year-old structure unconstitutional, putting future enforcement of labor law very much in doubt.
I won’t bother to document all the plainly unacceptable public behavior Musk engaged in at the time, because we’d be here all day. But the letter mentioned “recent allegations against our CEO and his public disparagement of the situation.” That referred to a Musk tweet making light of an episode in which Musk allegedly exposed his erect penis to a Space X contract flight attendant/masseuse and promised to buy her a horse if she’d give him a happy ending. Musk said the charges were “utterly untrue,” but Business Insider reported that after the flight attendant/masseuse brought sexual harassment charges, Space X paid her $250,000 to go away. Guilty or not, Musk did Space X no favors by joking publicly about the matter.
That Space X management’s retaliation constituted an illegal unfair labor practice was a slam dunk. An NLRB regional office gathered the charges together, filed a legal complaint against Space X, and scheduled an administrative law hearing on a case that the company was sure to lose. But before that hearing could occur, Musk sued the NLRB, arguing that the agency couldn’t investigate Space X because the NLRB itself was unconstitutional.
Musk’s lawsuit against the NLRB recycled some arguments used successfully in the 2024 Supreme Court case SEC v. Jarkesy, in which a hedge fund manager whom the SEC busted for securities fraud was freed from paying a $300,000 fine on the grounds that the agency’s administrative law judges lacked constitutional authority to impose it. Musk, it turned out, helped bankroll the plaintiff in that case, along with the billionaire Mark Cuban. When people like me say that the United States is an oligarchy ruled by billionaires, this is the kind of thing we’re talking about.
The Fifth Circuit ruled that the National Labor Relations Act is unconstitutional because the president is barred by statute from firing at will the administrative law judges who decide NLRB cases brought by the agency’s 26 regional offices. A president can fire an NLRB administrative law judge only on the recommendation of the Merit Systems Protection Board, an independent agency that protects the rights of federal employees. The MSPB can recommend such a firing only “for good cause,” and only after the MSPB grants the administrative law judge in question an opportunity to defend himself or herself at a public hearing. MSPB members, the Fifth Circuit decision further complains, are themselves protected statutorily from at-will firings; a president may remove one “only for inefficiency, neglect of duty, or malfeasance in office.”
If our notional employer still feels wronged after the NLRB board rules against him, he or she can file an appeal in federal court. I half expected the Fifth Circuit judges to further complain that the president can’t fire federal judges (only Congress can remove them through impeachment), but they stopped short of condemning an independent judiciary as an intolerable infringement on presidential power.
The ruling doesn’t shut down the NLRB entirely because it applies only to cases in Louisiana, Mississippi, and Texas, where the Fifth Circuit has jurisdiction. But Jennifer Abruzzo, who was President Joe Biden’s NLRB general counsel, told me that the decision will “open the floodgates for employers to forum-shop and seek to get injunctions” in those three states. Abruzzo added that the NLRB “should be appealing this, seeking a rehearing,” but it’s doubtful that it will.
In a sane world, we could rest confident that the Fifth Circuit’s attempt to repeal the New Deal would be reversed by the Supreme Court. But there’s every reason to believe that the Supreme Court will uphold it, because it, too, is trying to repeal the New Deal. It’s especially hostile to job protections at independent agencies, and indeed I believe it will eventually chuck these even at the Federal Reserve, which it’s tried vaguely to shield from Trump’s power grabs. When the Fed loses its independence, that will be a bad day for the oligarchs. But this Labor Day they can toast the NLRB’s imminent destruction.
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