SpaceX’s legal challenge against the structure of the National Labor Relations Board (NLRB) will remain in Texas federal court for now, after a U.S. appeals court overturned a previous decision that would have transferred the lawsuit to California. A panel from the 5th U.S. Circuit Court of Appeals issued a two-sentence order on Friday, vacating U.S. District Judge Rolando Olvera’s July decision. Judge Olvera had refused to reconsider an earlier ruling that transferred the case from his Brownsville, Texas, court to Los Angeles.
The appeals court issued its decision without prejudice, noting that a related appeal remains pending. This ruling allows the NLRB to potentially seek another transfer of the lawsuit to California, where SpaceX is based. The company is also facing an administrative board case there, accused of illegally firing engineers who criticized CEO Elon Musk.
SpaceX has separately claimed that Judge Olvera improperly failed to rule on the company’s request to pause the NLRB case until the lawsuit concludes. In May, the 5th Circuit temporarily blocked the board case from proceeding while it reviews SpaceX’s appeal.
An NLRB spokeswoman declined to comment, and SpaceX did not immediately respond to a request for comment.
SpaceX filed the lawsuit in January, challenging the NLRB’s in-house enforcement proceedings, where administrative law judges and the five-member board, appointed by the president, hear unfair labor practice claims brought by the board’s general counsel. The company argues that these judges and board members are improperly insulated from at-will removal by the U.S. president. SpaceX also claims that the NLRB’s proceedings violate the separation of powers and its constitutional right to a jury trial.
Several other companies, including Amazon.com, Starbucks, Trader Joe’s, pipeline operator Energy Transfer, a Michigan hospital operator, a small Missouri bank, and a film producer, have made similar claims against the NLRB.
In April, SpaceX filed a second lawsuit in Texas federal court in response to a separate NLRB complaint, which accused the company of forcing laid-off workers to sign severance agreements containing illegal provisions. U.S. District Judge Alan Albright in Waco blocked that board case from moving forward in July, pending the outcome of the lawsuit.
The NLRB maintains that these claims about its structure lack merit and argues that the companies challenging the board are attempting to distract from their violations of federal labor law.
The 5th Circuit panel, which includes Circuit Judges Jerry Smith and Andrew Oldham, both appointed by Republican presidents, and Circuit Judge Carl Stewart, appointed by Democratic former President Bill Clinton, is handling the case, SpaceX v. NLRB, No. 24-40315.
