Fifth Circuit Attempts To Claw Back Elon Musk’s NLRB-Killing Lawsuit

A labor lawyer tells the Sun that he has never seen anything like the move made by the Fifth Circuit in a case involving the National Labor Relations Board.

AP/Michel Euler, pool, file
Elon Musk on May 15, 2023, at Paris. AP/Michel Euler, pool, file

In a case brought by billionaire Elon Musk’s SpaceX against the National Labor Relations Board, a panel at the Fifth Circuit Court of Appeals is making the unusual move to attempt to keep the case in Texas after a Texas judge approved moving the case to California.

In the case, lawyers for SpaceX are arguing that the NLRB is unconstitutional because proceedings at the NLRB, in their opinion, bypass the company’s right to a trial by jury.

SpaceX’s attorneys also say that the structure of the agency and the limits on the removal of administrative judges at the NLRB infringe upon the president’s authority. The case could have major implications if the courts side with the company. 

The venue of the case has been an issue parties have fought over because if the case is brought in Texas, it will likely be appealed to the Fifth Circuit, the most conservative circuit in the country.  If it is tried in California it will be appealed to the Ninth Circuit, a much more liberal court.

Although the incident in question, the alleged wrongful firing of eight engineers, happened in California and the company is headquartered in California, SpaceX decided to bring the suit in Texas, citing some of the company’s facilities there.

In mid-February, the Texas jurist who was assigned the case, Judge Rolando Olvera, approved the transfer of the case to California, where most of the people involved in the case reside and where the court said it should be rightly heard.

The Fifth Circuit attempted to intervene, saying the Los Angeles court that was assigned the case should not hear it and telling Judge Olvera to request that the case be transferred back to his court.

Judge Olvera did request the case back, but the California court continued to process the case and is not required to send it back because it is under the jurisdiction of the Ninth Circuit. It’s not yet clear where the case will ultimately be heard.

A labor lawyer at Julien, Mirror, Singla, and Goldstein, Seth Goldstein, tells the Sun that he has never seen anything like the move made by the Fifth Circuit.

“I believe that the Fifth Circuit has had a habit of questionable venue decisions,” Mr. Goldstein says. “This is obviously forum shopping by SpaceX and Morgan Lewis.”

Since Mr. Musk’s company began making the argument that the NLRB is unconstitutional, other corporations have adopted the stance as well, including Amazon and Trader Joe’s.

As the legal case over the constitutionality of the NLRB is wrapped up in a dispute over the venue, Mr. Goldstein says he is expecting that the NLRB proceedings that the legal case arose from might be delayed as well.

“You look into the NLRB docket, I think that the board is going to adjourn this case until May,” Mr. Goldstein says. “I think that they’re worried that there might be an injunction.”

The court allowing the NLRB proceedings to be put on pause could be an important precedent in itself. If an injunction is granted in this case, it could mean every company would immediately file for an injunction in court when a labor complaint is brought, effectively rendering the NLRB useless.

The potential delay in the board proceedings, though, also appears to be in anticipation of a major Supreme Court decision on a similar topic, in SEC v. Jarkesy.
In SEC, opponents of the Securities and Exchange Commission argue that the structure of the agency is unconstitutional and a ruling from the Supreme Court could affect all administrative agencies, depending on the scope.

The New York Sun

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