Elon Musk’s SpaceX sues US agency that accused it of illegally firing workers

SpaceX has filed a lawsuit against the US National Labor Relations Board (NLRB) to block a case accusing the company of illegally firing employees who criticized CEO Elon Musk. SpaceX claims the structure of the NLRB violates the US Constitution.

Livemint
Updated5 Jan 2024
SpaceX on Thursday sued US  labor board to block its case accusing the company of illegally firing employees
SpaceX on Thursday sued US labor board to block its case accusing the company of illegally firing employees(REUTERS)

Elon Musk's SpaceX on Thursday sued the US labor board over a case of illegal firing of employees. According to the US agency, workers were illegally sacked by the rocket and satellite maker for allegedly calling CEO Elon Musk a “distraction and embarrassment”.

Also Read: SpaceX Falcon 9 rocket launches first set of Starlink satellites that can beam phone signals from space: WATCH

In response to the complaint, Elon Musk's firm argued that the case should be put on hold because the structure of the US agency is unconstitutional. Consequentially, the company has taken legal action against the US labor board challenging its constitutionality. 

In the lawsuit filed in Brownsville, Texas federal court, SpaceX has claimed that the structure of the National Labor Relations Board (NLRB), which issued a complaint against the company on Wednesday, violates the US Constitution.

Also Read: In a first, India to launch GSAT-20 satellite on SpaceX Falcon 9 rocket: Details here

The labor board alleges that SpaceX violated federal labor law by firing eight workers in 2022. These workers were sacked for signing onto the letter which accused Musk of making sexist comments against company policies. 

The case is set up by an administrative judge and then a five-member board appointed by the US President. The board's decision can be appealed in federal court.

Also Read: Elon Musk's SpaceX to sell insider shares at $97 each in tender offer, say reports

SpaceX in its lawsuit claimed the NLRB's structure as unconstitutional. The space firm mentioned that because federal law only allows board members and administrative judges to be removed for cause, and not at will, the NLRB's structure is unconstitutional. The lawsuit seeks to block the NLRB case from moving ahead.

This is not the first time SpaceX has used this tactic to block a case against it. Earlier, the space firm used the trick to block an administrative case by the US Department of Justice claiming the company illegally refused to hire refugees and asylum recipients.

Also Read: Billionaire Elon Musk's SpaceX explores insider share sale, valued at over $175 billion

As a consequence, a federal judge in Brownsville, where Thursday's case was filed, in November put the administrative case on hold, pending the outcome of a lawsuit by SpaceX. The judge said that the U.S. Constitution required administrative judges at the Justice Department to be appointed by the president, and not the attorney general as they currently are.

In addition to SpaceX, NLRB is also facing a similar lawsuit from a Starbucks Corp employee who opposed the unionization of the New York store where she works. The worker sued the board in October after it denied her petition for an election to dissolve the union. The agency has not responded to that lawsuit.

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