By Daniel Wiessner
(Reuters) -A U.S. appeals court on Tuesday agreed with Elon Musk's SpaceX and two other companies that the U.S. National Labor Relations Board's structure is likely unlawful and blocked the agency from pursuing cases against them.
The ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals is the first by an appeals court to find that a law shielding NLRB administrative judges and the board's five members from being removed at will by the president is likely illegal.
The
5th Circuit on Tuesday said the protections from removal prevent the president from exercising his power to control the executive branch.
"Because the executive power remains solely vested in the President, those who exercise it on his behalf must remain subject to his oversight," wrote Circuit Judge Don Willett, an appointee of Republican President Donald Trump.
A series of similar cases challenging the board's structure are pending, and the Trump administration is making the same arguments after the president fired a Democratic member of the board in January and she sued to get her job back.
The 5th Circuit upheld decisions by three judges in Texas that blocked NLRB cases alleging illegal labor practices by SpaceX, pipeline operator Energy Transfer, and Aunt Bertha, which operates a social services search engine, pending the outcome of their lawsuits.
"The Employers have made their case and should not have to choose between compliance and constitutionality," wrote Willett.
The board and the companies did not immediately respond to requests for comment.
Musk was a top adviser to Trump, spearheading an effort to drastically shrink the federal workforce and slash government spending, until the two men had a public falling out in May. SpaceX has a separate pending lawsuit against the NLRB seeking to block a different board case.
The NLRB is the only federal agency that hears private-sector labor disputes. The agency's general counsel can issue complaints against employers or unions that are heard by administrative judges, whose decisions can be appealed to the board.
The five-member board has been paralyzed and unable to issue decisions since Trump in January fired Member Gwynne Wilcox. The NLRB was designed by the U.S. Congress to be independent from the White House, and before Wilcox no board member had ever been removed by the president.
Tuesday's panel included a second Trump appointee and a judge appointed by Republican President George H.W. Bush.
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Sandra Maler)
