Labor & Employment Law Daily Wrap Up, PROCEDURE—N.D. Tex.: Employer granted permanent injunction of NLRB adjudicatory structure after finding of unconstitutionality, (May 18, 2026)

By Ronald Miller, J.D.

The constitutional defect identified by the Fifth Circuit is not contained in a single, easily severable clause.

A federal district court in Texas granted an employer’s motion for summary judgment concluding that the employer was entitled to declaratory and injunctive relief upon a finding that the removal provisions governing the NLRB’s adjudicatory structure are unconstitutional and that the administrative adjudication of the legal claims and remedies at issue violated the Seventh Amendment. The NLRB initiated administrative proceedings against the employer, alleging violations of the NLRA. In response, the employer filed this action, asserting that the structure of the NLRB violates Article II of the Constitution and that the agency’s adjudication of certain claims violates the Seventh Amendment. The court concluded that permanent injunctive relief was warranted and enjoined the Board from resuming or continuing the administrative proceedings against the employer under the current unconstitutional structure (Aunt Bertha dba Findhelp v. NLRB, No. 4:24-cv-00798-P (N.D. Tex. May 15, 2026)).

Administrative proceedings. The NLRB initiated administrative proceedings against the employer, alleging violations of the NLRA. Those proceedings were to be adjudicated before an administrative law judge, whose decision would be subject to review by the Board. Before the administrative hearing began, the employer filed this action, asserting that the structure of the NLRB violates Article II of the Constitution and, independently, that the agency’s adjudication of certain claims violates the Seventh Amendment.

The district court granted a preliminary injunction based on the employer’s Article II challenge to the ALJ removal protections, halting the administrative proceedings. The Fifth Circuit affirmed, holding both that district courts have jurisdiction to hear such structural constitutional challenges and that the preliminary injunction was a proper exercise of discretion.

Removal provisions unconstitutional. With respect to the NLRB’s ALJ removal protections, the Fifth Circuit addressed the merits of the Article II challenge, explaining that “ALJs are inferior officers insulated by two layers of for-cause removal protection, an arrangement the Supreme Court and this circuit have both held unconstitutional.” Thus, under the law-of-the-case doctrine and the mandate rule, the district court was not free to revisit those determinations.

The Fifth Circuit’s analysis likewise informed the treatment of the Board member removal protections. The Fifth Circuit emphasized that Humphrey’s Executor v. United States, 295 U.S. 602 (1935), represents a “narrow” exception and cautioned against extending it to agencies that are not a “mirror image” of the Federal Trade Commission.

The NLRB does not fit within that narrow exception. The Fifth Circuit recognized that the Board exercises significant executive authority, including the investigation, prosecution, and adjudication of unfair labor practice charges. That combination of powers places the NLRB well outside the limited category of agencies contemplated by Humphrey’s Executor and raises the same Article II concerns that have led courts to reject similar tenure protections in other contexts.

Accordingly, the court granted the employer’s motion for summary judgment with respect to the unconstitutionality of the NLRB tenure structure for both ALJs and Board members.

Severance. Next, the court rejected the NLRB’s argument that the court should sever the unconstitutional removal provisions and permit the administrative proceedings to continue.

Severability permits a court to excise an offending provision while leaving the remainder of the statute intact, but only where the resulting scheme remains fully operative and consistent with Congress’s design.

The constitutional defect identified by the Fifth Circuit is not contained in a single, easily severable clause. It arises from a “stacked” or “layered” structure of removal protections spanning multiple statutes and institutions. Because the constitutional problem is produced by multiple layers acting in combination, there is no single provision the court can excise to cure the defect.

Severance would not remedy the employer’s injury. As the Fifth Circuit made clear, the harm lies in being subjected to an unconstitutional proceeding at all. Allowing the proceedings to go forward under a judicially altered framework would perpetuate that harm.

Board member removal. The same reasoning applies to the Board-member removal protections. Striking the limitation in 29 U.S.C. § 153(a) would not merely remove an unconstitutional feature; it would transform the nature of the Board itself by converting it into an at-will, President-controlled body while leaving intact the same broad adjudicatory and policymaking authority Congress conferred.

Accordingly, the employer was entitled to judgment as a matter of law on its claim that the structure of the NLRB violates Article II of the Constitution and that the agency’s adjudication of certain claims violates the Seventh Amendment, such that declaratory relief was warranted.

Having prevailed on the merits of its Article II claims, the employer was entitled to relief barring the NLRB from continuing to prosecute it through an unconstitutionally structured administrative proceeding.

Seventh Amendment claim. Because in the operative Administrative Complaint, the NLRB demanded that the employer compensate private individuals for direct or foreseeable pecuniary harms and pay “reasonable consequential damages” resulting from alleged unfair labor practices, those remedies are retrospective, compensatory, and monetary in nature and therefore mirror the type of relief sought in a traditional common lawsuit.

Here, the NLRB sought to determine whether the employer committed a legal wrong against private parties, whether that conduct caused monetary injury, and the amount of compensatory and consequential damages owed. Those are classic functions of a common-law court and jury. Yet those determinations are assigned to an executive-branch tribunal that affords no civil jury at any stage of the proceeding.

This constitutional defect is not cured by subsequent judicial review. Once the employer is compelled to defend against claims for legal monetary relief in the Board’s administrative forum, the constitutional injury has already occurred.

The court rejected the Board’s contention that it lacked jurisdiction to resolve this claim. The damages issue presented a threshold constitutional challenge to the forum itself: whether the NLRB may compel the employer to litigate claims for legal monetary relief in a nonjury administrative proceeding.

Whether a claim implicates the Seventh Amendment jury right is a constitutional question for courts, not a matter of labor-policy administration. The NLRB may not adjudicate and award compensatory, consequential, or other legal monetary relief against the employer through an administrative proceeding that affords no civil jury.

Accordingly, the employer was entitled to judgment as a matter of law on its Seventh Amendment claim. Permanent injunctive relief was likewise appropriate here.

The case is No. 4:24-cv-00798-P.

Judge: Pittman, M.

Attorneys: Talley Ray Parker (Jackson Lewis) and David A. Kelly (Jackson Lewis) for Aunt Bertha dba Findhelp. Maxie Gallardo for NLRB.

Companies: Aunt Bertha; Findhelp

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