Fifth Circuit Upholds Injunction Because NLRB Structure Is Likely Unconstitutional

On August 19, 2025, in Space Exploration Tech. Corp. v. National Labor Relations Board, et al., a panel of the U.S. Court of Appeals for the Fifth Circuit upheld preliminary injunctions that had halted NLRB complaint proceedings. The court held that the employers that obtained the injunctions will likely prevail on their arguments that multiple protections that stand in the way of the president’s removing NLRB administrative law judges (ALJs) and Board members violate the Constitution. This decision opens the door for other employers to seek similar injunctions to stop ongoing NLRB proceedings.

The District Court Lawsuits and Consolidated Appeals

Three employers facing NLRB unfair labor practice (ULP) complaints obtained preliminary injunctions in three different federal district courts in Texas by challenging the constitutionality of the statutory removal protections for Board members and ALJs. The NLRB appealed, and the appeals were consolidated at the Fifth Circuit. 

Limitations on the President’s Power to Remove Inferior Officers and Agency Heads

The Fifth Circuit based its decision on Article II of the Constitution, which vests “[t]he executive Power” solely in the president. Subordinates who exercise that power on the president’s behalf, the court said, must remain subject to his oversight. 

NLRB ALJs are inferior officers who preside over ULP complaint proceedings and issue initial decisions. ALJs may be removed only “for good cause,” as determined by the Merit Systems Protection Board (MSPB), an independent, quasi-judicial agency that adjudicates federal employee personnel action appeals. MSPB members themselves can be removed only for good cause.

The NLRB is a five-member Board of presidential appointees that, among other things, administratively adjudicates claims of NLRA violations. Section 3(a) of the National Labor Relations Act provides that Board members may be removed by the president only “for neglect of duty or malfeasance in office[.]” 

Employers Likely to Succeed on the Merits

The Fifth Circuit held that the employers are likely to succeed on the merits of their constitutional challenges to removal protections for both ALJs and Board members.  

Regarding NLRB ALJs, the court likened them to the Securities and Exchange Commission ALJs at issue in Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022). The court held that both are “inferior officers” with substantial authority, but their two layers of for-cause protection unconstitutionally impede the president from removing them.

 Regarding Board members, the court said the general rule is that a president can remove subordinate agency heads at will. In Humphrey’s Executor v. U.S., 295 U.S. 602 (1935), the Supreme Court created an exception from this general rule for certain multi-member agencies. But the Fifth Circuit found that decision inapplicable because, unlike the agency commissioners at issue in Humphrey’s Executor, Board members wield substantial executive power through administrative, policymaking, and prosecutorial authority. The court cited Trump v. Wilcox, 145 S. Ct. 1415 (2025), in which the Supreme Court stayed an order reinstating a Board member removed by President Trump and held that Board members “exercise considerable executive power.” Further, the Fifth Circuit differentiated the NLRB from agencies whose heads are required by statute to be balanced along party lines or whose members lack prosecutorial power.

Irreparable Harm from Being Forced to Proceed Before an Unlawful Tribunal

The Fifth Circuit held the employers showed they would be irreparably harmed by being subjected to proceedings before an unconstitutionally structured agency. The here-and-now injury of appearing before an unlawful tribunal, the court held, is inflicted the instant the proceeding begins—and the Constitution does not force litigants to endure that injury just to keep alive the right to contest the tribunal’s legitimacy after the damage is done.

Balance of Equities and Public Interest Favor Preliminary Relief

Finally, the Fifth Circuit held the employers established that the balance of the equities and public interest justified granting them preliminary injunctive relief. Neither the government nor the public is injured, it said, when a court stops unlawful agency action. Instead, the public interest is served when the law is followed. Accordingly, the court held, “[t]he [e]mployers have made their case and should not have to choose between compliance and constitutionality.”

NLRB Arguments Failed, But May Pose Potential Issue Later

Before reaching the merits of the case, the Fifth Circuit rejected a Board jurisdictional challenge by holding that an anti-injunction law was inapplicable. The court held that the Norris-LaGuardia Act does not strip courts of subject matter jurisdiction to enter injunctions against the NLRB where the case does not arise from an employer’s “labor dispute” with its employees but rather from a dispute about the agency’s structure. Recent Supreme Court decisions have reiterated that federal courts have jurisdiction to hear challenges to the constitutionality of an agency’s structure. 

Finally, the Fifth Circuit held that it was premature to rule on the NLRB’s argument that the court could sever any offending removal protections, making an injunction unnecessary. The court held that at the preliminary injunction stage, it need not decide whether any final remedy should involve severance instead of a permanent injunction. This severability issue could come into play later in the litigation as part of a final remedy if the employers are otherwise successful. 

Implications and Potential Circuit Split

Employers that can establish venue and jurisdiction in the Fifth Circuit now have a clear path to seek preliminary injunctions to stop ongoing NLRB proceedings. But the decision sets up a potential split with other circuit courts. Several federal district courts outside the Fifth Circuit have ruled that the Humphrey’s Executor exception applies to Board members. Further, as the dissenting opinion noted in the Fifth Circuit panel decision, other federal appeals courts have held that at the preliminary injunction stage, an employer must make a concrete showing that the removal restrictions will cause it actual irreparable harm in the proceedings against it—not just that the NLRB proceeding itself will cause harm. For example, the dissent states, such a showing of harm could be based on evidence that the president wanted to remove an agency official at issue but held off doing so in consideration of removal protections. Ultimately, the Supreme Court may need to resolve these issues.