Amazon and SpaceX attack US labor watchdog in court

Amazon and SpaceX are seeking to hamstring the National Labor Relations Board, asking a court to declare its processes for upholding labor law unconstitutional. But judges on a three-person panel appeared skeptical when the companies presented their arguments Monday.

In two separate cases before the Fifth Circuit Court of Appeals, the two companies argued that the NLRB is unlawfully forcing them to participate in administrative law proceedings over alleged anti-labor actions. The Amazon case centers around whether it’s required to bargain with the union at its JFK 8 fulfillment center on Staten Island, while the SpaceX case involves a charge by former employees who claimed they were fired after being critical of CEO Elon Musk.

A ruling in favor of the companies could undermine the NLRB’s power to enforce protections for workers. It comes just as vocal pro-union President Joe Biden is leaving office and deregulation-friendly President-elect Donald Trump takes over. Trump notably counts Musk among his chief allies after his massive fundraising push. The NLRB is an independent agency with five board members appointed by the president to 5-year terms.

During oral arguments, the judges mostly prodded attorneys on the finer points of the companies’ decisions to appeal, and the timeline of their objections. At one point, Judge James Graves Jr., an Obama appointee, expressed doubt that Amazon had even met the conditions for an appeal — suggesting it should have waited on the ruling from the district court first. Two days after Amazon’s notice of appeal, the district court denied Amazon’s request for a temporary restraining order on its NLRB proceedings.

George W. Bush-appointed Judge Priscilla Richman similarly pressed SpaceX’s counsel Michael Kenneally about why the company rushed to an appeal, rather than letting the case progress in a lower court. Kenneally said SpaceX waited as long as it felt it could to bring its challenge and accused the government of leaning on procedural arguments because it couldn’t defend the NLRB’s constitutionality. Graves appeared skeptical. “That sounds to me about like the argument that, ‘well, procedure doesn’t matter if I win on the merits, so just skip right over procedure,’” he said.

Both companies are seeking to short-circuit the NLRB’s proceedings with a court order, which requires demonstrating this would cause them irreparable harm. But in Amazon’s case, NLRB counsel Tyler Wiese called the company’s deadline for the district court “imaginary,” and said, “merely proceeding through an administrative process is not irreparable harm.”

Amazon and SpaceX both argue that the NLRB’s administrative proceedings are tainted because its board members or administrative law judges are unconstitutionally insulated from removal. They point to Article II of the Constitution, which says the president must “take care that the Laws be faithfully executed,” which they say includes removing officials.

Amazon also says the NLRB is violating the Seventh Amendment, which protects the right to a jury trial in certain civil cases. It argues that the NLRB shouldn’t be allowed to decide on financial remedies related to the case because it would deny the company due process. Cox said the board itself “improperly interfered with the [union] election by exercising its prosecutorial authority,” so failing to stop the proceedings would let the NLRB as as judge and prosecutor.

The NLRB says it feels confident in a 1937 Supreme Court ruling on the constitutionality of the National Labor Relations Act. “It is nothing new for big companies to challenge the authority of the NLRB to enforce workers’ rights so as not to be held accountable for their violations of the National Labor Relations Act,” NLRB General Counsel Jennifer Abruzzo said in a statement. “While the current challenges require the NLRB to expend scarce resources defending against them, we’ve seen that the results of these kinds of challenges is ultimately a delay in justice, but that ultimately justice does prevail.”