Michael Hiltzik of the Los Angeles Times reports on Elon Musk’s latest foray into disrupting the lives of other people. He’s suing to destroy the National Labor Relations Board because it is weighing in on his company’s decision to fire some workers.
We are witnessing the accelerated rollback of the New Deal and the past nine decades of progressive reforms.
He writes:
Few business leaders have taken to heart more than Elon Musk the old lawyer’s saw that if you don’t have the facts or the law on your side at trial, pound the table.
Musk has truculently flouted regulatory standards of all varieties as the guiding spirit of companies such as Twitter, Tesla and SpaceX — keeping factories open despite pandemic shutdown orders, allegedly committing securities fraud by issuing misleading tweets about his investment plans and ignoring government safety recommendations for self-driving automotive technologies.
As I’ve reported, Musk has gotten his way with regulators and municipal officials “through bluster and intimidation.”
Now he’s trying what may be his most audacious flip-off to regulators yet:
Faced with an accusation by the National Labor Relations Board that SpaceX improperly fired nine employees in 2022, among other illegal acts, the company, which is controlled by Musk, filed a lawsuit in federal court in Texas to declare the NLRB’s action — indeed, the board itself — unconstitutional.
Now he’s trying what may be his most audacious flip-off to regulators yet:
Faced with an accusation by the National Labor Relations Board that SpaceX improperly fired nine employees in 2022, among other illegal acts, the company, which is controlled by Musk, filed a lawsuit in federal court in Texas to declare the NLRB’s action — indeed, the board itself — unconstitutional.
There’s more to it than that, however. The SpaceX lawsuit takes direct aim at the very enforcement structure of the NLRB, through which appointed administrative law judges weigh unfair labor practice charges laid against employers and recommend penalties to be imposed by the board itself.
The company’s argument is that because the judges are largely immune from being fired other than “for good cause,” their role in enforcement deprives accused parties of their constitutional right to trial by jury.
It also asserts that the board’s power to act as judge and jury in employment cases and the members’ immunity from being removed by the president violates the separation of powers principle in the Constitution. In sum, SpaceX claims that it’s being held “subject to unlawful proceedings before an unconstitutionally structured agency.”
More such claims are in the offing from businesses facing regulatory scrutiny. According to a transcript obtained by Bloomberg, grocery chain Trader Joe’s made the same argument at a Jan. 16 NLRB hearing on charges that it engaged in illegal union-busting by retaliating against unionization advocates among its workers.
What are these companies up to? The SpaceX claims are unusual, but they’re not unique in recent regulatory litigation. Similar claims have been brought against the Securities and Exchange Commission and the Consumer Financial Protection Bureau.
“This is an effort by a group of lawyers who are foes of the administrative state and the New Deal-era legislation that created the NLRB and the SEC to essentially end enforcement of those statutes,” says Catherine Fisk, an employment and labor law authority at UC Berkeley law school.
Unable to challenge the laws themselves — they’ve been upheld by Supreme Court decisions dating back to the 1930s — or the regulations directly, Fisk told me, “they’re arguing that the administrative structure is in some part unconstitutional.”
Before delving into the details of the SpaceX lawsuit, let’s examine the NLRB’s enforcement case. The agency says SpaceX illegally fired the nine workers for circulating an open lettercomplaining about Musk’s “repeated conduct of issuing inappropriate, disparaging, sexually charged comments on Twitter,” which he owns. The silence of SpaceX management about Musk’s conduct, the letter said, allowed a “culture of sexism, harassment and discrimination” to “pervade … the workplace.”
The NLRB filed a formal complaint against SpaceX on Jan. 3, encompassing not only the firings but charges that it illegally interrogated workers and conducted illegal surveillance of their activities. The agency scheduled a hearing on the charges before an administrative law judge for March 5 in Los Angeles.
The very next day, SpaceX filed its lawsuit.
By some measures, SpaceX’s response to the NLRB charges might be interpreted as overkill. Even if it’s found to have committed all the violations, the consequences are meager. The NLRB can’t levy monetary fines.
It can order back pay and reinstatement for workers who have been wrongly discharged, but those wouldn’t make much of a dent in the finances of a company that was reported to have brought in $8 billion in revenue last year from government and commercial contracts.
Moreover, SpaceX hasn’t yet come before an administrative law judge over the NLRB charges, much less having them voted on by the full board. Its lawsuit, then, looks like a shot across the NLRB’s bow. The company asks the trial judge in Texas to block the NLRB’s case against it, declare that the NLRB’s structure is unconstitutional, and permanently prohibit the agency from pursuing unfair labor practice charges via administrative law judges.
That points to the conclusion that this case, and others like it, aim to exploit the veer to the right seen throughout the federal judiciary generally and the Supreme Court in particular.
This variety of attack on regulations went out of fashion in the 1930s, Fisk observes. The Supreme Court, which had overturned a sheaf of New Deal initiatives as well as state minimum wage laws, turned back to the middle in the face of rising public disdain and the court-packing scheme of Franklin Roosevelt.
FDR ultimately abandoned his proposal, but after 1936 the court ceased ruling against the New Deal — upholding the National Labor Relations Act, which created the NLRB, in 1937.
“For 85 years, those arguments weren’t made,” Fisk says, “because lawyers knew that they would get nowhere with them — they might even get sanctioned. The Supreme Court signaled that it was up to Congress to design regulatory structures.”
But today’s Supreme Court isn’t your great-grandfather’s Supreme Court. “The Supreme Court has given lawyers reason to think that they might be able to invalidate part or all of these statutes as being unconstitutional.”
As recently as last week, a majority of justices appeared ready to overturn or at least pare back the so-called Chevron doctrine, the nearly 40-year-old principle that courts should defer to agencies’ interpretations of their governing laws as long as those interpretations aren’t plainly unreasonable.
Overturning the doctrine, as industry litigants urged the court to do during oral arguments Jan. 17, could sap regulatory agencies’ ability to base their rule-making on expert advice.
Although Congress could theoretically overcome any regulatory problems created by an adverse court ruling by amending the laws in question, that’s not a good bet given the profound dysfunction reigning these days on Capitol Hill. The industries will have achieved their goals for years into the future.
That brings us to Musk’s litigation strategy. SpaceX filed its lawsuit against the NLRB not in Southern California, where the company is headquartered, or Washington, D.C., where the NLRB maintains its main office, but in federal court in Brownsville, Texas, a judicial outpost on the Mexican border. This reflects the practice of filing anti-government lawsuits in remote federal courtrooms in Texas, where plaintiffs have a good chance of drawing a right-wing judge.
On the face of it, that tactic may have failed in this case, because the Brownsville court has two judges, one of whom was appointed by Donald Trump and the other by Barack Obama, and the SpaceX case was assigned to Rolando Olvera, who was Obama’s appointee.
SpaceX, however, is playing a longer game. Any appeal from the Texas federal court would go to the extremely conservative U.S. 5th Circuit Court of Appeals, which I’ve described in the past as “the hackiest of hack-ridden federal courts.”
The New Orleans-based appellate court upheld Texas’ malevolent SB 8 antiabortion law in 2022, for example, after which the Supreme Court allowed the law to go into effect.
Last year it partially endorsed a ruling by federal Judge Matthew Kacsmaryk of Texas narrowing access to the abortion drug mifepristone. Kacsmaryk’s ruling was based on a tendentious and long-abandoned reading of an antique 1873 law, but that was enough for the issue to come before the Supreme Court, which has the case on its docket this year.
More to the point, the 5th Circuit has implicitly endorsed the practice of challenging regulations by taking aim at the constitutionality of regulatory agencies. It did so in a case targeting the Consumer Financial Protection Bureau brought by the payday lending industry, which has long been in the CFPB’s crosshairs.
A 5th Circuit panel composed of three Trump-appointed judges ruled the bureau’s funding mechanism unconstitutional; the government appealed that ruling to the Supreme Court, which heard oral arguments on Oct. 3 but hasn’t yet ruled….
The NLRB has called foul on SpaceX’s choice of venue, calling the company’s rationale for filing in Brownsville “less than paper thin.” The allegedly unlawful conduct of SpaceX took place entirely at the company’s headquarters in the Southern California enclave of Hawthorne, and nothing actually happened in Texas. The government has asked Olvera to transfer the case to federal court in Los Angeles, but he hasn’t yet ruled.
Put it all together, and the SpaceX lawsuit bears watching.
As I’ve written before, conservative federal judges, many of them appointed by Trump, have the power to move the country to the far right for decades to come, eroding reproductive health care, eviscerating gun control laws and making life more difficult for ordinary Americans depending on the federal government to protect their rights. Elon Musk, pursuing his own personal interests, is urging them to keep at it.
And if Musk doesn’t win his law suit, he will claim the decision was rigged and join Trump in the conclusion that the courts are a threat to democracy.
Musk also knows that if his case eventually ends up at The Supreme Court that the majority of the justices tend to side with employers and the so-called free market. Biden has been working to enforce our labor and trade regulations. He appointed Lina Khan, an anti-trust scholar, to lead the Federal Trade Commission. She has been a thorn in the side of big businesses that merge assets, reduce competition and are part of the reason companies have been getting away with price gouging. Less competition among companies means Americans will pay more for goods and services.
Another big consideration in this election is The Supreme Court. It is likely that the winner of the election will get two more Supreme Court appointments. Can we really afford to put that power in the hands of Donald Trump?
As for the court appointments – that’s what gets the real Republicans and regular conservatives to hold their noses, lie to their spouses and daughters, and vote for trump. Ha! Biden should appoint a “Justice in the on-deck circle” now. And keep appealing.
Wait – that’s a billboard and we love our billboards littering the highways in Missouri: Will you lie to your daughter and vote for Trump?
As for musk the boys… sorry, Atlas Shrugged.
I don’t know how much longer the United States can remain a first-world nation with this iteration of SCOTUS. Should the Democrats win the Senate and the White House, the first thing they need to do is expand SCOTUS to 13 justices – one for each circuit. Time to redo the Senate rules that Republicans run roughshod over while stymieing Democrats.
Elon Musk is a Reichwing union-busting POS.
This is what we get for electing Trump, and Republicans in general. Together they form an insatiable maw that seeks to consume the resources and power of this country to make a very few of them fabulously wealthy, even though most of them are already.
Never, ever believe a word they say. These are people who see a dollar in your hand as theirs, and they will do whatever is necessary to take it, including violence. They are poisoned people. And they are destroying this country, because they have no love for it or its people. They care only about themselves.
Nothing new about any of it. There’s always been scum, and it’s always hard to wipe the stench away. Because it’s made of blood and lies.
Our blood, their lies.
Well . . . yeah . . . it’s nothing less than corporate gang-rape, of both of the planet, at least over last century and this one, and now the United States as a democracy. CBK
Never believe a Republican when it comes to concern for workers. They have no such concern. To them, workers are replaceable. Drop dead on the line and they’ll just toss your carcass (still warm, btw) out behind the plant and put some other sucker in your place.
The Republican plan for labor has no comfort for workers.
Amazing how Trump has conned millions of poor people and working folks
He gets a lot of credit for intelligence and character traits he’s never possessed.
He’s the patron saint of the clueless and angry.
I just ran across the following story about how the ACLU is fighting to force its own employees into arbitrations rather than accessing the NLRB, something that could set a very bad precedent for employees nationwide.
https://www.nlrbedge.com/p/the-aclu-is-trying-to-destroy-the