Constitutional challenges to NLRB intensify as Texas judge blocks energy company case

GALVESTON, Texas (CN) — A Texas federal judge stayed a National Labor Relations Board case against an energy company this week, finding the board’s removal protections for its administrative law judges are likely unconstitutional.

A former employee of Texas gas company La Grange Acquisition brought a complaint against the company saying he was retaliated against for raising safety concerns and then fired for filing a complaint with the NLRB. A regional director for the board found the case had merit and brought it before an NLRB judge. La Grange and its parent company Energy Transfer then filed suit to block the proceeding.

In a ruling Monday, U.S. District Court Judge Jeffrey Brown, who was appointed by Donald Trump, agreed with the energy giant's argument that the labor board’s policy for removing judges likely infringes on the president’s Article II power to remove executive officers. Brown issued a preliminary injunction staying the administrative proceeding while the case proceeds in federal court.

Energy Transfer did not respond to requests for comment. An NLRB spokeswoman declined to comment on the ruling.

The NLRB, a New Deal-era federal agency designed to protect workers’ rights by investigating and adjudicating complaints of unfair labor practices, argued a preliminary injunction would render the National Labor Relations Act effectively toothless, since the board is the law’s only enforcement mechanism.

“Depriving employees of the sole mechanism to vindicate their NLRA rights cannot serve the public interest,” the board argued in a court filing.

Judge Brown dismissed the argument, finding that a stay against an individual proceeding would not overly burden the agency, while La Grange being subjected to a proceeding before an "unaccountable" administrative law judge was a harm that “cannot be undone.”

An administrative law judge can only be removed if the labor board members bring action to remove them. A separate agency, the Merit Systems Protection Board, must then find there is good cause to remove the judge. Judge Brown cited the 5th Circuit’s ruling in Jarkesy v. Securities & Exchange Commission that a similar removal process for SEC administrative law judges is unconstitutional. The Supreme Court upheld the Jarkesy ruling last month.

Other major companies facing labor complaints have made similar arguments against the NLRB. On July 23, U.S. District Judge Alan Albright, another Trump appointee in the Southern District of Texas, stayed NLRB proceedings against SpaceX based on similar reasoning. Amazon, Starbucks and Trader Joe's have also argued the board is unconstitutional.

National Labor Relations Board general counsel Jennifer Abruzzo has accused corporations of jumping on the bandwagon by mounting similar legal challenges to try to gut the labor watchdog’s authority.

“There is no way … that we’re going to succumb to the pressures imposed in addressing these challenges and in defending the constitutionality of our agency structure,” Abruzzo said during an April webinar hosted by the Roosevelt Institute, a liberal think tank.

“Unfortunately, it seems to me (these companies would) rather spend their money initiating court litigation rather than improving their workers’ lives and their own workplace operations,” Abruzzo added.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit