BROWNSVILLE, Texas (CN) — SpaceX asked a federal judge on Thursday to nix an impending National Labor Relations Board administrative hearing into whether it illegally fired employees for criticizing its founder and CEO Elon Musk.
Musk, the world’s richest person, is known for making controversial statements. His preferred platform is X, the social media site he bought in October 2022.
Long before he acquired the site, then known as Twitter, Musk’s posts thereon irked some employees of his rocket ship company Space Exploration Technologies Corp., or SpaceX.
Eight of them aired their concerns in an open letter they sent to thousands of their colleagues on June 15, 2022.
“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” they wrote. “As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every tweet that Elon sends is a de facto public statement by the company. It is critical to make clear to our teams and to our potential talent pool that his messaging does not reflect our work, our mission or our values.”
SpaceX fired the letter writers and invited any other employees who had problems with Musk to quit.
The eight axed workers lodged unfair labor practices charges against SpaceX with the National Labor Relations Board in November 2022.
After “finding merit” to the accusations, the director of the National Labor Relations Board’s Los Angeles regional office — SpaceX’s headquarters is in the Los Angeles suburb Hawthorne — issued a complaint on Wednesday against the company.
In the complaint, the regional director says SpaceX grilled other employees about the letter, told them not to discuss their interrogations, “created an impression of surveillance (including reading and showing screenshots of communications between employees)” and barred workers from sharing the letter, NLRB spokeswoman Kayla Blado said in an emailed statement.
Blado stressed the complaint is not a decision by the National Labor Relations Board, a five-member body that currently only has four members.
“It is the first step in the regional office litigating the allegations after investigating the charges and finding merit,” Blado noted.
She said the regional director will now try to reach a settlement with SpaceX. If those talks fail, there will be a hearing before a National Labor Relations Board administrative law judge in Los Angeles on March 5.
Should the judge rule against SpaceX, Blado explained, it can appeal to the board and then to a federal appeals court.
A settlement appears unlikely as SpaceX sued the agency in Brownsville, Texas, federal court Thursday, naming as defendants the agency’s board members and the administrative judge that will preside over the in-house proceeding. SpaceX listed the judge as John Doe because it does not know yet who will oversee the hearing.
SpaceX's choice of venue was not a random choice: The company’s Starbase, from which it recently did a test flights of a 33-engine rocket, sits on a peninsula just outside of Brownsville near the southern tip of Texas.
SpaceX’s claims parallel those made by a Texas hedge fund manager in a challenge of the U.S. Securities and Exchange Commission’s procedures.
An SEC administrative law judge ordered George Jarkesy to pay a $300,000 penalty, disgorge $700,000, and barred him from providing financial services after the agency charged him with lying to investors and inflating the value of his hedge fund.
Jarkesy appealed to the Fifth Circuit claiming the SEC had violated his Seventh Amendment right to a jury trial, and that SEC administrative law judges were unconstitutionally shielded from being removed from office by the president.
The Biden administration convinced the Supreme Court to take up the case after a divided Fifth Circuit panel sided with Jarkesy. A decision by the high court, which heard arguments on Nov. 29, is expected before July.
Heavily citing the Fifth Circuit’s Jarkesy v SEC decision, SpaceX says in its 25-page lawsuit the National Labor Relations Board’s in-house administrative proceedings have the same issues as the SEC’s, namely they violate Article II, the Fifth Amendment, and the Seventh Amendment of the U.S. Constitution.
Represented in its lawsuit by Catherine Eschbach with the Houston office of Morgan Lewis & Bockius, SpaceX focuses on Article II, which vests control of the executive branch in the president.
Space X claims it also mandates that the president be able to choose all federal agency administrative law judges.
But SpaceX says the National Labor Relations Board’s administrative judges are insulated from presidential oversight because they “are removable only for cause, by officials who themselves are removable only for cause.”
SpaceX seeks an injunction to stop the administrative proceeding from going forward and a declaration the agency’s policies are unconstitutional.
Blado, the National Labor Relations Board spokeswoman, said its general counsel will seek an order for SpaceX to reinstate the fired employees and pay them back wages.
As noted in its regional director’s complaint against SpaceX, the board’s general counsel also wants the company ordered to post a notice of employees’ rights under the National Labor Relations Act for 120 days in its workplaces and intranet platforms; to permit a representative of the agency to train SpaceX supervisors about unfair labor practices; and to send apology letters to each of the eight fired employees.
The National Labor Relations Board declined to comment on the lawsuit.
Follow @cam_langford
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.
Additional Reads
-
-
San Francisco sues Oakland over plan to change airport name April 18, 2024
