An Unconstitutional Agency May Finally Meet Its End

G et ready for another major win for the Constitution and the separation of powers. Late last month, to little fanfare, a federal district court in Texas indicated that the National Labor Relations Act is unconstitutional, a finding that it will soon make official in a formal ruling. This case seems destined for the Supreme Court, giving the justices their biggest chance yet to roll back the out-of-control administrative state and restore the constitutional structure that upholds Americans’ freedoms.

This case — Space Exploration Technology Corporation v. NLRB et al. — is centered on the president’s authority to remove agency officials. Beginning in 2019, SpaceX found itself in the crosshairs of National Labor Relations Board general counsel Jennifer Abruzzo’s ongoing campaign against arbitration agreements. SpaceX, which requires employees to sign these agreements, soon faced a complaint by the NLRB, which claimed that the company was engaged in an unfair labor practice. SpaceX responded by arguing that the NLRB’s very existence was unconstitutional.

The district court agreed with SpaceX, finding that members of the NLRB and its administrative-law judges are too insulated from the president’s control because they can only be removed from office in limited circumstances. It’s unconstitutional, the court reasoned, to permit Congress to “eliminate the President’s ability to remove principal officers,” given that Article II of the Constitution vests the president with the full power of the executive branch.

The district Court stopped short of finding the National Labor Relations Act unconstitutional, only issuing a preliminary injunction regarding the NLRB (which the act created). But the court made it clear that such a holding will be coming within the next few months. When a law is found unconstitutional, a court has two options: Carve out the law’s unconstitutional portions while upholding the rest, or overturn the law entirely. The district court wasn’t shy about what it plans to do: “There is no appropriate way to sever any of the removal protections to remedy the constitutional problems with the NLRB’s structure.” In other words, the National Labor Relations Act is doomed, at least within the territory covered by the court’s jurisdiction.

Such a ruling would be transformational. If there were no agency to administer the National Labor Relations Act, almost all laws that apply to private-sector labor relations would become unenforceable. Cases pending before the NLRB would be null and void. Union elections would likely stop entirely. The Fifth Circuit Court of Appeals would quickly take up the case, potentially extending the act’s nullification and likely forcing the Supreme Court to act. If the Supreme Court agreed with the original district court, Congress would have little choice but to amend the act and remedy its constitutional defects. Absent congressional action, states would be responsible for deciding how to regulate private-sector labor relations.

Yet the district court’s coming ruling will likely have an even broader impact on the administrative state, which has faced challenges before. In 2021 the Supreme Court ruled in Collins v. Yellen that restrictions on the president’s power to remove the director of the Federal Housing Finance Agency were unconstitutional. Justices, however, stopped short of overturning the law that governs that agency. Their decision followed the court’s 2020 Seila Law decision, which also rejected restrictions on the president’s removal power.

The SpaceX case before the district court now presents an opportunity for the legal system to continue down the path of restoring the separation of powers. If this court’s decision is upheld by higher courts, it would reinforce the trend of requiring greater presidential control over agency officials, including lower-agency officials who have traditionally been more insulated from political control. Twenty-two federal agencies might have to be transformed to align with the Constitution. While such an outcome would be revolutionary in modern politics, it would be far from unprecedented in American law, and it would uphold the constitutional requirement that all executive control be vested in the presidency.

The district court put it best: “It is not in the public interest to have an increasingly expansive Executive branch that slips away from the Executive’s control, and thus from that of the people.” Here’s hoping that higher courts — and ultimately the Supreme Court — agree and extend the logic of this ruling. Our constitutional structure — and fundamental freedoms — depend on our regaining control of our own government.