On August 19, 2025, the U.S. Court of Appeals for the Fifth Circuit — the federal court that hears appeals from federal trial courts in Texas, Mississippi, and Louisiana — held that statutory removal protections for NLRB Board members and administrative law judges (“ALJs”) are likely unconstitutional. The case is Space Exploration Technologies Corporation v. NLRB (“SpaceX”). While this decision is, technically, narrow and does not itself render the entire NLRB unconstitutional, it does signal that NLRB enforcement actions across the country may soon be in peril.
Stage Setting
The National Labor Relations Board is, generally speaking, divided into two primary components: an investigative and prosecutorial branch that brings and litigates unfair labor practice complaints, and an adjudicatory branch headed by a five-member Board that reviews decisions issued by ALJs in unfair labor practice cases.
Both the Board members and the ALJs enjoy statutory protections against removal from office. The President can only remove Board members “for neglect of duty or malfeasance in office,” while ALJs can only be removed “for good cause” as determined by a separate agency whose members are appointed by the President: the Merit Systems Protection Board (“MSPB”). MSPB members similarly can only be removed by the President “for inefficiency, neglect of duty, or malfeasance in office.” The employers in this case attacked these statutory protections as unconstitutional and, by extension, challenged the Board members’ and ALJs’ authority to rule on the cases before them.
The Facts
The SpaceX case started when three employers (SpaceX, Energy Transfer, and Findhelp), each of which faced an unfair labor practice complaint, filed suit in federal court to enjoin the administrative proceedings. They argued that the NLRB could not proceed against them because the NLRB’s Board members and the ALJs adjudicating the complaints are unconstitutionally shielded from removal by the President.
The employers each sought a preliminary injunction to prevent the NLRB proceedings from moving forward against them until a court could make a final determination on whether the NLRB’s structure is constitutional. Each employer received a preliminary injunction.
The NLRB appealed each decision, and the cases were consolidated.
The Decision
The Fifth Circuit affirmed the preliminary injunctions, concluding that the NLRB’s structure is likely unconstitutional and confirming the halt to the NLRB proceedings against the three employers. The court held that the two layers of for-cause protection enjoyed by ALJs is “sufficiently onerous that the President has lost the ability to take care that the laws are faithfully executed.” Meanwhile, because Board members “wield substantial executive power” through their “administrative, policymaking, and prosecutorial authority,” they must be subject to the President’s power to remove subordinates at-will. The court held that the employers were entitled to a preliminary injunction because subjecting them to an unconstitutional proceeding is inherently an irreparable harm (to obtain a preliminary injunction, a party must show “irreparable harm”).
A note on the word likely: because each case was on appeal from a preliminary injunction (which is designed to maintain a status quo while the court ultimately decides the merits of the challenge), the Fifth Circuit was tasked with deciding if the employers were likely to succeed on the merits of their challenges to the Board members’ and ALJs’ removal protections. Given the nature of the court’s reasoning, this is largely a distinction without a difference, but it is worth keeping in mind.
What Employers Should Know
This decision does not itself render the NLRB unconstitutional. The decision’s immediate effect only applies to the three employers who filed suit against the NLRB. That said, the downstream effects of this case are likely to be much more significant. Other federal courts may adopt the Fifth Circuit’s reasoning — federal district courts in Texas, Mississippi, and Louisiana are bound to — and enjoin administrative proceedings against other employers.
Given the immense ramifications of the Fifth Circuit’s reasoning, it is very likely that the Supreme Court will take up the case if asked. If the Supreme Court were to affirm the decision, we would expect that NLRB proceedings against employers nationwide would be called into question unless and until Congress amended the statutory removal protections (or the Supreme Court “severed” the offending provisions).
Of note, in its May 2025 decision in Trump v. Wilcox, a majority of the Supreme Court signaled that it may agree with the Fifth Circuit’s reasoning. In that case, a member of the NLRB and a member of the MSPB, each of whom was fired by the President, obtained preliminary injunctions against their removals while their lawsuits proceeded on the merits. The Supreme Court granted a stay of the preliminary injunctions (basically, allowing the firings to proceed while the merits were litigated). The Court reasoned that a member’s removal must be upheld during the pendency of the merits challenge to prevent the member from potentially exercising executive power they were not entitled to wield.
Employers with active proceedings before the NLRB will want to consult with their counsel to determine what course of action is right for them in this shifting legal landscape, including, for example, suits like those brought by the three employers in SpaceX to enjoin any unfair labor practice proceedings pending against them.
