NLRB Structure Under Fire—Action for Employers To Take Now

Two recent decisions from the Fifth Circuit are casting doubt on the structure of the National Labor Relations Board. In one case involving SpaceX, the court ruled that statutory protections insulating Board members from presidential removal likely violate the Constitution. Another panel went further, suggesting the NLRB’s essential structure may be unconstitutional. Together, these rulings open the door for employers to challenge the validity of Board proceedings and stall enforcement actions.

At present, the rulings only bind employers and NLRB cases within the Fifth Circuit’s territory—Texas, Louisiana, and Mississippi. Employers elsewhere should not expect their local NLRB regional office to stop prosecuting cases or pause elections. That said, the Fifth Circuit’s reasoning is powerful ammunition, and it will almost certainly be raised in other circuits. If even one other court agrees, the Supreme Court will be under pressure to resolve the issue. In the meantime, employers nationwide should preserve the defense in any pending NLRB matter to avoid waiving it later.

For employers, the immediate takeaway is uncertainty. If the NLRB is constitutionally defective, any decision it issues could be subject to challenge. That means charges, complaints, and even election results could all be put on unstable footing. At the same time, if Board members can be removed at will, the pendulum swings of labor policy may accelerate more sharply with changes in administration.

So what should you do? First, if you have an open case with the NLRB—whether it involves unfair labor practices, a pending election, or compliance issues—consider what steps you might take to preserve constitutional objections. Failing to raise the issue early could constitute a waiver. Second, employers in union-sensitive industries should factor this uncertainty into their strategy. This is the time to tighten compliance and training. Regardless of how the constitutional fight plays out, the current Board continues to pursue enforcement. A dispute like this one, that reaches the very highest levels of the National Labor Relations Board organization, are not likely to filter down immediately to actions being taken at the regional levels. We have not seen significant changes in enforcement actions that began prior to the departure of former General Counsel Abruzzo.

The bottom line: The rules of labor law may be changing not only in substance but also in terms of who gets to make them. Employers should not treat pending matters as routine. Preserving defenses, reviewing strategy, and preparing for volatility will put you in the best position as the constitutional showdown evolves.

If you have questions about the structure of the NLRB or an open case, please contact the authors of this article or any member of the Labor & Employment team.