Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—5th Cir.: SpaceX jumped the gun in appeal challenging constitutionality of NLRB administrative proceedings, (Mar 6, 2025)

By Jason Albright, J.D.

The company had requested a ruling from a federal district court in Texas on its preliminary injunction request “no later than May 2, 2024.”

The Fifth Circuit lacks subject-matter jurisdiction over SpaceX’s appeal from a Texas federal district court’s “effective denial” of its motion for injunctive relief challenging—in ongoing unfair-labor-practice proceedings concerning the company’s allegedly unlawful firing of union organizers who circulated an employee survey—what the aerospace and global satellite business alleges is the unconstitutional administrative structure of the National Labor Relations Board. SpaceX’s “sole conceivable injuries,” according to the appeals court, stem from participating in a teleconference in an allegedly unconstitutional administrative proceeding, but the company previously participated in two similar teleconferences with another ALJ, and it points to no resulting consequences therefrom. These alleged injuries are likewise “not sufficiently serious to warrant interlocutory appeal,” the Fifth Circuit found (Space Exploration Technologies Corp. v. NLRB, No. 24-40315 (5th Cir. Mar. 5, 2025)).

SpaceX. SpaceX, according to the court, operates a space launch business and Starlink, a global satellite-based internet service.

Open letter. In June 2022, a group of SpaceX employees sent an open letter demanding that SpaceX take certain actions. The letter also sought support from other employees, across all the company’s facilities, to complete a hyperlinked survey to express support for the employees’ demands.

Discharges. Because the employees’ activity allegedly violated company policies, SpaceX discharged four employees involved with the mass distribution of the letter. Later, the company discharged several employees for allegedly lying during a subsequent leak investigation. It also discharged another employee for unrelated performance issues. The fired employees reported to—or were supervised by—managers in California.

NLRB charges. In November 2022, the discharged employees filed charges against SpaceX with the NLRB, alleging that SpaceX had violated the NLRA when it fired them. On January 3, 2024, an NLRB Regional Director found merit to the claims and issued an order consolidating the employees’ administrative cases. The resulting consolidated complaint included a notice setting a hearing for March 5, 2024.

Employer’s “constitutional” action. On January 4, however, SpaceX sued the NLRB in the U.S. District Court for the Southern District of Texas, alleging that the NLRB’s structure is unconstitutional and requesting declaratory and injunctive relief.

SpaceX asked the NLRB to stay the underlying administrative proceedings, and the agency refused.

Also a forum shopper? On January 11, the NLRB moved to transfer the case to the Central District of California, arguing that venue in the Southern District of Texas was, in fact, improper because no parties resided in the district and there was no substantial connection between the conduct in the complaint and the venue.

Preliminary injunction request. The next day, SpaceX moved for a preliminary injunction in the Southern District of Texas, requesting that the district court halt the NLRB proceedings “unless and until the constitutional defects are remedied.”

Transfer granted. On February 15, however, the district court granted the NLRB’s motion to transfer and initiated the electronic transfer of this case to the Central District of California.

Emergency mandamus. And the next day, SpaceX petitioned for an emergency writ of mandamus from the Fifth Circuit, requesting that it direct the district court to vacate it transfer order.

To California and back. The Fifth Circuit stayed the transfer on February 19, but the case was subsequently docketed in the Central District of California. The Fifth Circuit then directed the Southern District of Texas to request return of the case from the Central District of California.

Because of a hold on issuance of the mandate, the administrative stay of the transfer to the Central District of California remained in effect. On March 7, SpaceX filed an expedited petition for en banc rehearing, which the Fifth Circuit denied on April 17. The appeals court also dissolved the administrative stay that day. After the Central District of California returned the case to the Southern District of Texas, but before the transfer order was effectuated, SpaceX asked the Texas district court to reconsider its transfer order or resolve the preliminary injunction before transfer. SpaceX did not request expedited briefing.

Ongoing administrative proceedings. The administrative proceeding in the underlying case began on March 5, but it was immediately continued to mid-May and then postponed indefinitely pending the resolution of certain subpoena disputes. On April 24, SpaceX learned that an NLRB administrative law judge had scheduled a teleconference on May 2 to address those discovery issues but that “SpaceX was not expected to produce any evidence before or during that call.”

Indecision below… and appeal. Then, on April 26, SpaceX filed a reply brief in support of reconsideration and requested a ruling from the Southern District of Texas “no later than May 2, 2024.”

On April 30, SpaceX noticed its appeal to the Fifth Circuit and moved for an injunction pending appeal the next day. The NLRB moved to dismiss the appeal, asserting there was no effective denial of SpaceX’s preliminary-injunction motion and therefore no jurisdiction. On May 2, the Fifth Circuit granted SpaceX’s request for injunction pending appeal and denied the NLRB’s motion to dismiss the appeal the next day.

Jurisdiction to review interlocutory orders. At issue, observed the Fifth Circuit, is whether the district court effectively denied SpaceX’s motion for a preliminary injunction. Under 28 U.S.C. § 1292(a)(1), the appeals court has jurisdiction to review interlocutory orders, including interlocutory orders that refuse or dissolve injunctions. This includes orders that do not expressly refuse an injunction but have the “practical effect of doing so.”

Preliminary injunction effectively denied? The appeals court rejected SpaceX’s argument that the district court effectively denied its motion for a preliminary injunction because it failed to rule on the motion on or before May 2. SpaceX failed to show the “serious, perhaps irreparable, consequence” required for an immediate appeal.

The employer argued that it needed a ruling on its motion by May 2 to avoid a teleconference on discovery issues in the underlying administrative proceeding. It had, however, previously participated in two similar teleconferences with another ALJ, and it pointed to no consequences resulting from its participation in those prior teleconferences. The administrative law judge also set the May 2 teleconference to address several subpoena issues that had halted the administrative proceeding. SpaceX was not expected to produce evidence before or during the teleconference, and nothing indicated that SpaceX would suffer any consequences from participating in the teleconference, let alone consequences “greater than the harm suffered by any litigant forced to wait until the termination of the [proceedings].”

“SpaceX’s sole conceivable injuries,” the Fifth Circuit noted, “stem from participating in a teleconference in an unconstitutional administrative proceeding. These are likewise ‘not sufficiently serious to warrant interlocutory appeal.’”

The case is No. 24-40315.

Judge: Ramirez, I.

Attorneys: Michael E. Kenneally (Morgan, Lewis & Bockius) for Space Exploration Technologies Corp. Tyler James Wiese for the NLRB, Jennifer Abruzzo, and Lauren M. McFerran.

Companies: Space Exploration Technologies Corp.

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