The Fight to Save the National Labor Relations Board

When President Franklin D. Roosevelt signed the National Labor Relations Act in 1935, it was almost immediately challenged in the courts by employers who expected the Supreme Court to strike it down as unconstitutional, as it had with other New Deal reforms. For close to two years, employers openly flouted the labor law as it was held up in the courts, confident in their ultimate triumph. During this period, the National Labor Relations Board was virtually powerless to carry out its mandate. The law — designed to guarantee workers the right to form unions and bargain collectively — was a dead letter. 

Then, in 1937, the nation’s top court issued a string of historic rulings upholding the Wagner Act and other key pillars of the New Deal. Overnight, the NLRB was empowered to enforce labor law and aid workers in their efforts to form unions. Over the next two decades, employers relented and unionization rates steadily increased. 

But corporate America never accepted this new political reality. Many corporate leaders held out hope that the courts or the political branches would overturn the Wagner Act and other New Deal reforms. “It took 14 years to rid this country of Prohibition,” reflected the longtime CEO of General Motors, Alfred P. Sloan, in 1945. “It is going to take a good while to rid the country of the New Deal, but sooner or later the ax falls and we get a change.”

Last month, Sloan’s corporate descendants came one step closer to realizing this dream when the 5th U.S. Circuit Court of Appeals, the nation’s most right-wing federal court, ruled a key component of the NLRB unconstitutional. 

The decision — in response to a lawsuit filed by Elon Musk’s company SpaceX — was the latest blow to an agency that has been under assault since Donald Trump’s return to the White House. The NLRB’s board — responsible for enforcing labor laws and ruling on disputes between workers and employers — has been effectively paralyzed since the president’s removal of member Gwynne Wilcox last January left the board without quorum. Trump’s firing of Wilcox, whose term was supposed to last until 2028, was without precedent and has left the agency struggling to function. Since January, the board has gone five months without issuing a single decision. This exceeds the cumulative total of four months without decisions during the NLRB’s first 90 years of existence. 

The hobbling of the NLRB has been good news for big employers like SpaceX, which filed its suit against the agency in response to complaints that the company had illegally fired eight employees in 2022. In that lawsuit, the company did not merely push back on the specific charges of unfair labor practices, but also argued that the New Deal agency’s independent and quasi-judicial design renders it unconstitutional. Quoting James Madison, the lawsuit alleged that the NLRB’s operations are “miles away from the traditional understanding of the separation of powers” and “the very definition of tyranny.” 

Not long after, other major corporations joined in on Musk’s crusade, including grocery chain Trader Joe’s — which also faces numerous union-busting allegations — and Jeff Bezos’ Amazon. The online retail giant went further in its attack on the agency, referencing the so-called nondelegation doctrine that was last invoked by the Supreme Court in 1935 to strike down another New Deal law. 

Since late 2023, 20 lawsuits have been filed against the agency arguing that different aspects of its structure are unconstitutional. This flurry of litigation has come largely in response to the NLRB’s pro-labor rulings during the Biden years, when Democratic board members and the Biden-appointed general counsel, Jennifer Abruzzo, fiercely championed the rights of workers to join and form unions. Not surprisingly, the Biden administration’s support for labor did not sit well with billionaires like Musk, who has long flouted the NLRB’s rulings against his companies. Early in Biden’s presidency, Musk and other companies took their complaints to the more sympathetic judiciary branch to make their dubious claims that the NLRB violated their rights as employers. 

The Biden administration, complained the world’s richest man in September 2021, was “controlled by unions.”

While last month’s ruling in the 5th Circuit does not go as far as some of the litigants had hoped in dismantling the NLRB, it has far-reaching consequences. The decision effectively obliterates the agency’s independence by striking down removal protections for board members as well as the in-house administrative law judges who adjudicate labor disputes between parties. According to the text of the NLRA, board members serve five-year terms and can only be removed by the president “for neglect of duty or malfeasance in office, but for no other cause.” For the first time in the agency’s history, Trump challenged this statute when he fired Wilcox, with the expectation that the Supreme Court will rule these protections unconstitutional. The 5th Circuit’s decision endorses this view, stating that the NLRA’s removal protections are “constitutionally suspect under modern separation-of-powers doctrine.” 

With the Supreme Court likely to affirm the president’s discretionary power to remove board members and in-house judges at-will, the agency will now be vulnerable to wholesale capture by an administration that is openly hostile to the labor movement. This seriously impairs the board’s “ability to function independently,” according to William B. Gould IV, Charles A Beardsley professor of law emeritus at Stanford Law School, who was chair of the NLRB from 1994 to 1998. It could also lead to a severely diminished pool of qualified people who are willing to serve, which “undercuts the statutory mission and will make the board appreciably less effective.” As a “practical matter,” Gould told me, these and other recent judicial decisions against the NLRB represent a “complete reversal” of the decisions of the 1930s. 

Bolstered by the sympathetic courts, the president has already started to reshape the agency by installing pro-management lawyers to leadership roles. His appointee for general counsel, Crystal Carey, is a partner at Morgan Lewis, the very law firm that has represented SpaceX and other companies in their cases against the agency. The president has nominated another veteran of Morgan Lewis — the current chief labor counsel at the Boeing Corporation — to serve on the board. 

While packing the NLRB with corporate attorneys, Trump has also carried out his own union-busting campaign inside the federal government. In March, the president issued an executive order that unilaterally stripped collective bargaining rights from more than a million federal employees under the pretext of national security. This has already resulted in the termination of union contracts for nearly half a million employees across nine agencies, including the departments of Health and Human Services, Veterans Affairs and Agriculture and the Environmental Protection Agency. At the end of August, the president took his anti-labor crusade even further when he ordered half a dozen more agencies to end their collective bargaining agreements. Mike Podhorzer, a former political director of the AFL-CIO, described it to The New York Times as  “the largest act of union busting in American history.”

As the NLRB is further hollowed out, the labor movement will have limited options in resisting the corporate onslaught spearheaded by Musk and other billionaires. While labor-friendly states could boost organizing in some areas, federal law restricts state authority over private sector unionization (except when it comes to imposing “right-to-work” laws, of course). 

“Unless SCOTUS abandons the preemption doctrine,” Gould noted, “a series of 1950s SCOTUS rulings will make it impossible to use the states rather than the NLRB.” 

The “one open avenue,” says Gould, is to intensify labor organizing efforts and revive some of the tactics that proved effective in the years immediately preceding the NLRA, such as walkouts, boycotts and strikes. It is worth recalling that many of the labor movement’s biggest gains came before the Supreme Court upheld the Wagner Act in 1937, driven largely by the militancy of workers themselves. One month before the court’s landmark ruling, more than 160,000 workers engaged in 170 sit-down strikes across the country, which threatened to bring much of the economy to a standstill. “Industrial unionism was expanding not because of federal legislation,” observes labor historian Rick Fantasia, “but as a result of the successful expression of solidarity and militancy by the workers themselves.”

“A good, principled board can do much with the law, even confronting an unfriendly judiciary,” said Gould, who points to his own tenures on the NLRB and notes that the law “is always subordinate to union self-help and activism.” 

As labor law is turned against workers and union ranks dwindle to pre–New Deal lows, the labor movement would benefit from rediscovering the militancy that won its greatest victories.