US appeals court halts NLRB case against SpaceX over engineer firings

AUS appeals court has temporarily blocked a National Labor Relations Board case accusing SpaceX of illegally firing engineers who criticized CEO Elon Musk, as the rocket company pursues a legal challenge to the agency’s structure.

In a single-sentence order on Thursday, a three-judge panel of the New Orleans-based 5th US Circuit Court of Appeals barred the NLRB from proceeding with the administrative case pending SpaceX’s appeal of a judge’s “effective denial” of its motion for an injunction.

The 5th Circuit twice rejected SpaceX’s bid to overrule a decision by US District Judge Rolando Olvera in Brownsville, Texas, to transfer the case to California at the NLRB’s request.

SpaceX then asked Olvera to reconsider the transfer and take up its motion for a preliminary injunction pending the outcome of its lawsuit. The company this week filed an appeal, saying Olvera’s delay in deciding that motion amounted to a denial of it.

SpaceX in its lawsuit claims the NLRB’s in-house enforcement proceedings violate the US Constitution in various ways and that administrative judges and board members are improperly insulated from removal by the president. Amazon.com, Starbucks and Trader Joe’s have all raised similar arguments in pending board cases.

An NLRB spokeswoman declined to comment on the 5th Circuit order. SpaceX did not immediately respond to a request for comment.

In the underlying board case, SpaceX is accused of firing eight engineers who signed onto a letter to company executives accusing Musk of sexism and other misconduct. The company has said the workers’ actions were disruptive and not protected by federal labor law.

SpaceX sued the NLRB a day after the agency issued the complaint in January, and has since filed a similar lawsuit in Waco, Texas, federal court stemming from a separate board complaint involving the company’s severance agreements.

Thursday’s 5th Circuit order will likely delay a ruling by a special master on challenges to subpoenas in the administrative case, which is pending before an administrative judge in Los Angeles, and could push back hearings that were slated to be held in the case over the summer.

The 5th Circuit panel includes Circuit Judges Jerry Smith and Andrew Oldham, appointees of former Republican presidents Ronald Reagan and Donald Trump, respectively, and Carl Stewart, who was appointed by Democratic former President Bill Clinton.

The case is Space Exploration Technologies Corp v. NLRB, 5th US Circuit Court of Appeals, No. 24-40315. Reuters